Alternative Dispute Resolution

Module 1 - Understanding Conflict

Learning Outcomes

• On successful completion of this module, you will be able to: 


◦ Explain the nature of conflict in your personal life and/or at

work

◦ Describe the different types of conflict you may experience at

work and in your personal life

◦ Identify the possible outcomes of conflicts

◦ Define your own communication style

◦ Explain different ways to manage conflict

Understanding Conflict

• Scenario

• You are part of a team charged with negotiating the new collective
bargaining agreement for your union. Your union is requesting profit
sharing, a 10% raise for all union members, and an additional week
of vacation time. 

• 


• 

When you go into the meeting with management, they present their
terms, which include a 5% pay cut due to lower product demand and
greater responsibility to cover the cost of health care for union
members, which would amount to about $50 per person, per
paycheck. The lead team member laughs at management’s requests
and tells them they have a long way to go in order to avoid a
strike. You are uncomfortable with this comment, as you believe it
doesn’t set the right tone for the negotiation. In addition, the
statement appears to be threatening, which you know is something
to avoid during negotiation.

• 

When the team presents their items, management says there is no
way they can meet those demands, so the union better get more
realistic about the current economic state of the company. As you
leave the bargaining table with no progress, you know there is a long
way to go before the union and management will be able to come to
a resolution. The focus of this module is to discuss conflict and
negotiation and how to avoid situations, such as this one, when
negotiating.

• Understanding Conflict


• Conflict is a process that involves people disagreeing. 

• Similar to how conflicts can range from minor to major, negotiations

vary in terms of their consequences. A high-stakes negotiation at
work might mean the difference between a company’s survival and its
demise. 


• 

On the other end of the spectrum, we deal with minor negotiations on
a regular basis, such as negotiating with a friend about which movie
to see. 


• 

Maybe you make a concession: “OK, we’ll watch what you want but I
get to pick where we eat”. 


• 

Maybe you hold tough: “I don’t want to watch anything except a
comedy.” 


• 

Perhaps you even look for a third option that would mutually satisfy
both parties. Regardless of the level, conflict management and
negotiation tactics are important skills that can be learned. 

•

• One million workers (18,000 people per week) are assaulted on

the job in the United States alone!
• Types of Conflict

• There are three types of conflict that can arise within an
organization:

1. Intrapersonal conflict

2. Interpersonal conflict

3. Intergroup conflict

• Intrapersonal Conflict


• Intrapersonal conflict arises within a person.

• There are three types of intrapersonal conflict:

 Difference in Roles

A manager may want to oversee a subordinate’s work, believing that such

oversight is a necessary part of the job. The subordinate, on the other
hand, may consider such extensive oversight to be evidence of a lack of
trust.

Role Conflict

Role conflict involves having two different job descriptions that seem
mutually exclusive. This type of conflict can arise if you’re the head of one
team but also a member of another team.

Role Ambiguity

Perhaps you’ve been given the task of finding a trainer for a company’s
business writing training program. You may feel unsure about what kind of
person to hire - a well-known but expensive trainer or a local, unknown but
low-priced trainer. If you haven’t been given guidelines about what is
expected, you may be wrestling with several options.

• Interpersonal Conflict


• Interpersonal conflict is a type of conflict between two people.

• Interpersonal conflict can arise among individuals such as

coworkers, a manager and an employee, or CEOs and their staff. 


• 

Interpersonal conflict often arises because of competition or
because of personality or values differences. 


• 

Keeping conflicts centered around ideas rather than individual
differences is important in avoiding a conflict escalation. 

Example

In 1997, Michael Dell was asked what he would do about Apple computer:
“What would I do? I’d shut it down and give the money back to
shareholders.” Ten years later, Steve Jobs, as CEO of Apple Inc., indicated
he had clearly held a grudge as he shot back at Dell in an e-mail to his
employees, stating: “Team, it turned out Michael Dell wasn’t perfect in
predicting the future. Based on today’s stock market close, Apple is worth
more than Dell”. In part, their long term disagreements stem from their
differences. [2]

• Intergroup Conflict


• Intergroup conflict takes place among different groups.


• Intergroup conflict takes place among different groups, such as

different departments or divisions in a company; between union and
management; or between companies, such as companies who supply
the same customer. 

• 

Departments may conflict over budget allocations, unions and
management may disagree over work rules, and suppliers may
conflict with each other on the quality of parts. 

• 

Merging two groups together can lead to friction between the
groups – especially if there are scarce resources to be divided among
the group. 

Example

Canadian Air and Air Canada pilots were locked into years of personal and
legal conflict when the two airlines’ seniority lists were combined following
the merger. Seniority is a valuable and scarce resource for pilots, because
it helps to determine who flies the newest and biggest planes, who
receives the best flight routes, and who is paid the most. In response to
the loss of seniority, former Canadian Air pilots picketed at shareholder
meetings, threatened to call in sick, and had ongoing conflicts with pilots
from Air Canada. The conflicts with pilots continue to this day. [3]

• Is Conflict always bad?


• A moderate amount of conflict can be a healthy (and necessary) part
of organizational life. [4]

• To understand how to get a positive level of conflict, we need to

understand its root causes, consequences, and tools to help manage
it. 

• 


• 

The impact of too much or too little conflict can disrupt
performance. 

• 


• 

If conflict is too low, then performance is low. 


• 

If conflict is too high, then performance tends to be low.  

The goal is to hold conflict levels in the middle range, between high and
low. While it might seem strange to want a particular level of conflict, a
medium level of task-related conflict is often viewed as optimal, because it
represents a situation in which a healthy debate of ideas takes place.

• Is Conflict Always Bad?


• Research focusing on effective teams across time found that they
were characterized by low but increasing levels of process conflict
(how do we get things done?), low levels of relationship conflict with a
rise toward the end of the project (personal disagreements among
team members), and moderate levels of task conflict in the middle of
the task timeline. [5]

Task Conflict

Task conflict can be good in certain circumstances, such as in the early

stages of decision making, because it stimulates creativity. However, it can
interfere with complex tasks in the long run. [6]

Personal Conflict

Personal conflicts, such as personal attacks, are never healthy because

they cause stress and distress, which undermines performance. The worst
cases of personal conflicts can lead to workplace bullying.

Example

At Intel Corporation, all new employees go through a four-hour training

module to learn “constructive confrontation”. The content of the training
program includes dealing with others in a positive manner, using facts
rather than opinion to persuade others, and focusing on the problem at
hand rather than the people involved. The presence of this program
indicates that Intel understands the potentially positive effect of a
moderate level of conflict. [7]

• Self-directed learning

1. What are the types of conflict that individuals may have at
work? 

• 2. Which type are you experienced with the most?

• 3. What are some primary causes of conflict at work?

• 4. Explain how miscommunication might be related to a conflict

at work.

• Key Points

◦ onflict can be a problem for individuals and organizations. 

C
◦ There are several different types of conflict, including
intrapersonal, interpersonal, and intergroup conflict.

◦ Moderate conflict can be a healthy and necessary part of

organizational life. 

◦ Too much conflict, or too little conflict, can disrupt

performance. 

• Bibliography

• [ 1] National Institute for Occupational Safety and health. (1997).
Violence in the workplace. Retrieved November 14, 2008, from
<http://www.cdc.gov/niosh/topics/violence/>.


• 

[2] Haddad, C. (2001, April 18). Why Jobs and Dell are always
sparring. Business Week Online. Retrieved May 1, 2008, from
<http://www.businessweek.com/bwdaily/dnflash/apr2001/
nf20010418_416.htm>; Markoff, J. (2006, January 16). Michael Dell
should eat his words, Apple chief suggests. New York Times.
Retrieved January 19, 2007, from <http://www.nytimes.com/
2006/01/16/technology/16apple.html>.

 • 

[3] Stoykewych, R.E. (2003, March 7). A note on the seniority
resolutions arising out of the merger of Air Canada and Canadian
Airlines. Paper presented at the American Bar Association Midwinter
Meeting, Laguna Beach, CA.


• 

[4] Amason, A.C. (1996). Distinguishing the effects of functional and
dysfunctional conflict on strategic decision making: Resolving a
paradox for top management teams. Academy of Management
Journal, 39, 123-58.


• 

[5] Jehn, K.A., & Mannix, E.A. (2001). The dynamic nature of conflict:
A longitudinal study of intergroup conflict and group performance.
Academy of Management Journal, 44, 238-51.


• 

[6] De Dreu, C.K.W., & Weingart, L.R. (2003). Task versus relationship
conflict: Team performance, and team member satisfaction: A meta-
analysis. Journal of Applied Psychology, 88, 741-49.


• 

[7]Dahle, C. (2001, June). Is the Internet second nature? Fast
Company, 48, 144. 

Causes and Outcomes of Conflict

Introduction

There are many potential root causes of conflict at work.

Anything that leads to a disagreement can be a cause of conflict. 

Although conflict is common to organizations, some organizations have

more than others.

 • Organizational Conflict 

• Conflict tends to take different forms, depending upon the

organizational structure. [1]

• Causes of Conflict

◦ Limited Resources

◦
• Resources such as money, time, and equipment are often scarce. 


• 

Competition among people or departments for limited resources is a
frequent cause for conflict. 


• 

When a group of employees have access to resources while others
do not, conflict may arise among employees or between employees
and management. 

Example

Cutting-edge laptops and gadgets are expensive resources that may be

allocated to employees on a need-to-have basis in some companies.
While technical employees may feel that these devices are crucial to their
productivity, employees with customer contact, such as sales
representatives, may make the point that these devices are important for
them to make a good impression to clients. Because important resources
are often limited, this is one source of conflict many companies have to
live with.

◦ Task Interdependence

◦
• Task interdependence occurs when the accomplishment of your goal
requires reliance on others to perform their tasks.


• 

If you’re tasked with creating advertising for your product, you’re
dependent on the creative team to design the words and layout, the
 photographer or videographer to create the visuals, the media buyer
to purchase the advertising space, and so on. 

• Causes of Conflict

◦ Incompatible Goals

◦
• Sometimes conflict arises when two parties think that their goals are
mutually exclusive. 


• 

Within an organization, incompatible goals often arise because of the
different ways department managers are compensated. 

Example

A sales manager’s bonus may be tied to how many sales are made for the
company. As a result, the individual might be tempted to offer customers
“freebies” such as expedited delivery in order to make the sale. In
contrast, a transportation manager’s compensation may be based on how
much money the company saves on transit. In this case, the goal might be
to eliminate expedited delivery because it adds expense. The two will butt
heads until the company resolves the conflict by changing the
compensation structure. For example, if the company assigns the bonus
based on profitability of a sale, not just the dollar amount, the cost of the
expediting would be subtracted from the value of the sale. It might still
make sense to expedite the order if the sale is large enough, in which case
both parties would support it. On the other hand, if the expediting negates
the value of the sale, neither party would be in favor of the added expense.

◦ Personality Differences

◦
• Personality differences among coworkers are common. 


• 

By understanding some fundamental differences among the way
people think and act, we can better understand how others see the
world. 

 • 

Knowing that these differences are natural and normal lets us
anticipate and mitigate interpersonal conflict-it’s often not about
“you” but simply a different way of seeing and behaving. 

• Causes of Conflict

◦ Communication Problems

◦
• Sometimes conflict arises simply out of a small, unintentional
communication problem, such as lost e-mails, or dealing with people
who don’t return phone calls. 


• 

Giving feedback is also a case in which the best intentions can
quickly escalate into a conflict situation. 


• 

When communicating, be sure to focus on behavior and it’s effects,
not on the person.

Example

Jeff always arrives late to all your meetings. You think he has a bad
attitude, but you don’t really know what Jeff’s attitude is. You do know,
however, the effect that Jeff’s behavior has on you. 

You could say “Jeff, when you come late to the meeting, I feel like my time
is wasted.” Jeff can’t argue that statement, because it is a fact of the
impact of his behavior on you. It’s indisputable, because it is your reality. 

What Jeff can say is that he did not intend such an effect, and then you
can have a discussion regarding the behavior.

Feedback

When receiving feedback, non-attachment is essential for you to engage

effectively in the conversation and maximize the benefits to your
performance. 

The key things to remember for optimal results are:

 1. Acknowledge the facts

 2. Stay calm and focus on listening

 3. Offer opinions only when asked, don’t argue or be defensive

 4. Take time to absorb the message before you react (if a question is
posed, ask whether it is OK to answer it later so you have time to process)

 5. Make sure you understand the message before evaluating it

 6. Be attentive to the other person’s point of view

 7. Say “thank you”

• Outcomes of Conflict

• One of the most common outcomes of conflict is that it upsets
parties in the short run. [2]


• 

However, conflict can have both positive and negative outcomes.  


• 

On the positive side, conflict can result in greater creativity or better
decisions.


• 

On the negative side, conflict can be dysfunctional if it is excessive or
involves personal attacks or underhanded tactics.

Positive Outcomes

- Consideration of a broader range of ideas, resulting in a better, stronger

idea.

- Surfacing of assumptions that may be inaccurate.

- Increased participation and creativity.

- Clarification of individual views that build learning.

Example: As a result of a disagreement over a policy, a manager may

learn from an employee that newer technologies help solve problems in an
unanticipated new way.

Negative Outcomes

Increased stress and anxiety among individuals, which decreases

productivity and satisfaction.

- Feelings of being defeated and demeaned, which lowers individuals’

moral and may increase turnover.

- A climate of mistrust, which hinders the teamwork and cooperation

necessary to get work done.

• Is Your Job at Risk for Workplace Violence?


• You may be at increased risk for workplace violence if your job
involves the following:
Dealing with people

- Caring for others either emotionally or physically, such as at a nursing

home.

- Interacting with frustrated customers, such as with retail sales.

- Supervising others, such as being a manager.

- Denying requests others make of you, such as with customer service.

High Risk Situations

- High-

-
- Dealing with valuables or exchanging money, such as in banking. 

- Handling weapons, such as law enforcement.

- Working with drugs, alcohol, or those under the influence of them, such
as bartending.

- Working nights or weekends, such as gas station attendants. [3]

• Self-Directed Learning

A. What are some primary causes of conflict at work?

B. What are the outcomes of workplace conflict? 

C. Which types of job are the most at risk for workplace violence?
Why do you think that is?

D. What outcomes have you observed from conflict?

 • Key Points

◦ onflict has many causes, including organizational structures,
C
limitations on resources, task interdependence, goal
incompatibility, personality differences, and communication
challenges.

◦ Outcomes of well-managed conflict include increased

participation and creativity, while negatives of poorly managed
conflict include increased stress and anxiety.

◦ Jobs that deal with people are at higher risk for conflict.

• Bibliography

• [1] Jaffe, D. (2000). Organizational theory: Tension and change. New
York: McGraw Hill.


• 

[2] Bergman, Y.J., & Volkema, R.J. (1989). Understanding and
managing interpersonal conflict at work: Its issues, interactive
processes and consequences. In D.M Kolb & J.M Kolb (Eds.), Hidden
conflict in organizations (pp.7-19). Newbury Park CA: Sage. 


• 

[3] LeBlanc, M.M., & Kelloway, E.K. (2002). Predictors and outcomes
of workplace violence and aggression. Journal of Applied Psychology,
87, 444-53; National Institute for Occupational Safety and Health.
(1997). Violence in the workplace. Retrieved November 12, 2008, from
<http://www.cdc.gov/niosh/docs/96-100/>; National Institute for
Occupational Safety and Health. (2006). Workplace prevention
strategies and research needs. Retrieved November 12, 2008, from
http://www.cdc.gov/niosh/docs/2006-144/.

Conflict Management

Introduction
•

•      Conflict Management refers to resolving disagreements

effectively. 

• There are a number of different ways of managing organizational

conflict:

◦ Change the Structure

◦ Change the Composition of the Team

◦ Create a common Opposing Force

◦ Consider Majority Rule

◦ Problem Solve

• Change the Structure


• When structure is a cause of dysfunctional conflict, structural change
can be the solution to resolving the conflict. 

• 


• 

If the conflict is at an intergroup level, such as between two
departments, a structural solution could be to have those two
departments report to the same executive, who could align their
previously incompatible goals.

Vanessa has submitted her components list to Tom for purchasing. Tom,

as usual, has rejected two of the key components, refusing
the expenditure on the purchase. Vanessa is furious.

Sharon hits upon a structural solution:

•
 Change the Composition of the Team

• If the conflict is between team members, the easiest solution may be
to change the composition of the team, separating the
personalities that were at odds.


• 

In instances in which conflict is attributed to the widely different
styles, values, and preferences of a small number of members,
replacing some of these members may resolve the problem. 


• 

If that’s not possible because everyone’s skills are needed on the
team and substitutes aren’t available, consider a physical layout
solution.

Example

Research has shown that when known antagonists are seated directly
across from each other, the amount of conflict increases. However, when
they are seated side by side, the conflict tends to decrease. [1]

• Create a Common Opposing Force


• Group conflict within an organization can be mitigated by focusing

attention on a common enemy such as the competition.

• 


• 

The “enemy” need not be another company – it could be a concept,
such as a recession, that unites previously warring departments to
save jobs during a downturn.

Example

Two software groups may be vying against each other for marketing
dollars, each wanting to maximize advertising money devoted to their
product. But by focusing attention on a competitor company, the groups
may decide to work together to enhance the marketing effectiveness for
the company as a whole.

• Consider Majority Rule


• Sometimes a group conflict can be resolved through majority rule.
That is, group members take a vote, and the idea with the most votes
is the one that gets implemented. 


• 

The majority rule approach can work if the participants feel that the
procedure is fair. It is important to keep in mind that this strategy will
become ineffective if used repeatedly with the same members
typically winning.


• 

Moreover, the approach should be used sparingly. It should follow a
healthy discussion of the issues and points of contention, and not be
a substitute for that discussion.


• Problem Solve


• In problem solving mode, the individuals or groups in conflict are

asked to focus on the problem, not on each other, and to uncover
the root cause of the problem. 

• 


• 

This approach recognizes the rarity of one side being completely right
and the other being completely wrong.

• Conflict-Handling Styles

• Individuals vary in the way that they handle conflicts.  There are five
common styles of handling conflicts. 


• 

These styles can be mapped onto a grid that shows the varying
degree of cooperation and assertiveness each style entails. 

 • Avoidance

• The avoiding style is uncooperative and unassertive.


• 

People exhibiting this style seek to avoid conflict altogether by
denying that it is there. They are prone to postponing any decisions in
which a conflict may arise. While conflict avoidance may not be a
significant problem if the issue at hand is trivial, it becomes a problem
when individuals avoid confronting important issues because of a
dislike for conflict or a perceived inability to handle the other party’s
reactions. 

Example

People using this style may say things such as, “I don’t really care if we
work this out,” or “I don’t think there’s any problem. I feel fine about how
things are.” Conflict avoidance may be habitual to some people because
of personality traits such as the need for affiliation.

• Accommodation


• The accommodating style is cooperative and unassertive. 

• 

 • 

In this style, the person gives in to what the other side wants, even if
it means giving up one’s personal goals. Accommodation may be an
effective strategy if the issue at hand is more important to others
compared to oneself. However, if a person perpetually uses this style,
that individual may start to see that personal interests and well-being
are neglected.

Example

People who use this style may fear speaking up for themselves or they
may place a higher value on the relationship, believing that disagreeing
with an idea might be hurtful to the other person. They will say things such
as, “Let’s do it your way” or “If it’s important to you, I can go along with it.”

• Compromise

• The compromising style is a middle-ground style, in which
individuals have some desire to express their own concerns and get
their way but still respect the other person’s goals.


• 

In a compromise, each person sacrifices something valuable to
them. The compromiser may say things such as, “Perhaps I ought to
reconsider my initial position” or “Maybe we can both agree to give in
a little.”

Example

In 2005, the luxurious Lanesborough Hotel in London advertised incorrect

nightly rates for £35, as opposed to £350. When the hotel received a large
number of online bookings at this rate, the initial reaction was to insist that
customers cancel their reservations and book the correct rate. The
situation was about to lead to a public relations crisis. As a result, they
agreed to book the rooms at the advertised price for a maximum of three
nights, thereby limiting the damage to the hotel’s bottom line as well as its
reputation. [2]

• Competition

 • People exhibiting a competing style want to reach their goal or get
their solution adopted regardless of what others say or how they
feel. They are more interested in getting the outcome they want as
opposed to keeping the other party happy, and they push for the deal
they are interested in making. 

• 


• 

Competition may lead to poor relationships with others if one is
always seeking to maximize their own outcomes at the expense of
others’ well-being. 

• Collaboration

• The collaborating style is high on both assertiveness and
cooperation. This is a strategy to use for achieving the best
outcome from conflict-both sides argue for their position supporting
it with facts and rationale while listening attentively to the other side. 


• 

The objective is to find a win-win solution to the problem in which
both parties get what they want. They’ll challenge points but not
each other. They’ll emphasize problem solving and integration of
each others’ goals. 

Example

An employee who wants to complete a degree may have a conflict with

management when he wants to deduce his work hours. Instead of taking
opposing positions in which the employee defends his need to pursue his
career goals while the manager emphasizes the company’s need for the
employee, both parties may review alternatives to find an integrative
solution. In the end, the employee may decide to pursue the degree while
taking online classes, and the company may realize that paying for the
employee’s tuition is a worthwhile investment. This may be a win-win
solution to the problem in which no one gives up what is personally
important, and every party gains something from the exchange.

• Which Style is Best?


 • Like much of organizational behavior, there is no one “right way” to
deal with conflict. Much of the time, it will depend on the
situation. However, the collaborative style has the potential to be
highly effective in many different situations.


• 

Successful individuals are able to match their style to the
situation.


• 

Most individuals have a dominant style that they tend to use most
frequently. Think of your friend who is always looking for a fight, or
your coworker who always backs down from a disagreement. 

Example

If a driver cuts you off in traffic, ignoring it and going on with your day is a
good alternative to “road rage”. However, if a colleague keeps claiming
ownership of your ideas, it may be time for a confrontation. Allowing such
intellectual plagiarism to continue could easily be more destructive to your
career than confronting the individual

Research shows that when it comes to dealing with conflict, managers

prefer forcing, while their subordinates are more likely to engage in
avoiding, accommodating, or compromising. [3]

It is also likely that individuals will respond similarly to the person engaging
in conflict. For example, if one person is forcing, others are likely to
respond with a forcing tactic as well.

• What If You Don’t Have Enough Conflict Over

Ideas?

• Part of effective conflict management is knowing when proper
simulation is necessary. Many people think that conflict is inherently
bad - that it undermines goals or shows that a group or meeting is not
running smoothly. In fact, if there is no conflict, it may mean that
people are silencing themselves and withholding their opinions. 

Example

Traditionally, Hewlett-Packard Development Company LP was known as a

“nice” organization. Throughout its history, HP viewed itself as a scientific
organization, and their culture valued teamwork and respect. But over
time, HP learned that you can be “nice to death”. In fact, in the 1990s, HP
found it difficult to partner with other organizations because of their culture
differences. During role-plays, created to help HP managers be more
dynamic, the trainers had to modify several mock situations, because
participants simply said, “that would never happen at HP,” over the
smallest conflict. All this probably played a role in the discomfort many felt
with Carly Fiorina’s style as CEO and the merge she orchestrated with
Compaq Computer Corporation, which ultimately caused the board of
directors to fire Fiorina. On the other hand, no one is calling HP “too nice”
anymore.

- The reality is that within meaningful group discussions, there are usually
varying opinions about the best course of action. If people are suppressing
their opinions, the final result may not be the best solution. 

During healthy debates, people point out difficulties or weaknesses in a

proposed alternative and can work together to solve them. The key to
keeping the  disagreement healthy is to keep the discussion focused on
the task, not the personalities.

Example

A comment such as, “Jack’s ideas have never worked before. I doubt his
current idea will be any better” is not constructive. Instead, a comment
such as “This production step uses a degreaser that’s considered a
hazardous material. Can we think of an alternative degreaser that’s
nontoxic?” is more productive. It challenges the group to improve the
existing idea.

• Why Human Relations?


• Every friendship, romantic relationship, or work situation has
conflict. 


• 

How we handle the conflict is what shows our positive human
relations skills. Conflict management is a key skill to learn because
we already know our personal happiness and career success
depends on our ability to show positive human relations skills - even
when conflict is present. 


• 

Conflict can be minor disagreements or they can be major issues that
can impede success among team members. 

Either way, the ability to handle and resolve the conflict are imperative
to maintaining positive human relations in your work environment
and in your personal life, too.


• 

Conflict can be highly emotional, so having an awareness of our
emotions during a conflict (self-awareness emotional intelligence skill)
can prevent us from saying the wrong thing or saying something we
will regret. If we can recognize how we feel during a conflict, such as
angry, sad, or frustrated, we can begin to take steps to manage those
emotions (self-management emotional intelligence skill). 


• 

Once we are aware of and managing our emotions, it is much easier
to work toward a solution during the conflict. Otherwise, our emotions
may get the best of us, resulting in saying or doing something we
regret - which doesn’t solve the conflict at all!

• Self-Directed Learning

4. L ist three ways to decrease a conflict situation. What are some
pros and cons of each of these approaches?

5. Do you deal with conflict differently with friends and family than
you do at work? If so, why do you think that is?

 6. W hat is your usual conflict-handling style at work? Do you see

it as effective or ineffective?

7. Describe a situation in which not having enough conflict can be

a problem.

• Key Points

◦ onflict management techniques include changing
C
organizational structures to avoid built-in conflict, changing
team members, creating a common “energy,” using majority
rules, and problem solving.

◦ Conflict management styles include accommodating others,

avoiding the conflict, collaborating, competing, and
compromising. 

◦ People tend to have dominant style. At times it makes sense to

build in some conflict over ideas if none exists.

• Bibliography

• [1] Gordon, J., Mondy, R.W., Sharplin, A., & Premeaux, S.R. (1990).
Management and organizational behavior (p.540). New York: Simon &
Schuster. 


• 

[2] Horowitz, A., Jacobson, D., Lasswell, M., & Thomas, O. (2006,
January-February). 101 dumbest moments in business. Business 2.0,
7(1), 98-136.


• 

[3] Howat, G., & London, M. (1980). Attributions of conflict
management strategies in supervisor-subordinate dyads. Journal of
Applied Psychology, 65, 172-75.

Lesson Summary

• The key points from this module are the following:

• Conflict is a process that involves people disagreeing and can be a

problem for individuals and organizations. There are several different
 different types of conflict, including intrapersonal, interpersonal, and
intergroup conflict. A moderate amount of conflict can be a healthy
and necessary part of organizational life.


• 

Conflict has many causes, including organizational structures,
limitations on resources, task interdependence, goal incompatibility,
personality differences, and communication challenges. There can
be both negative and positive outcomes of conflict. Negative
outcomes include increased stress and anxiety and can develop a
climate of mistrust. Positive outcomes include increased
participation and creativity and a broader range of ideas. You are at
increased risk of workplace violence if your job involves dealing with
people such as at a nursing home, or being in high-risk situations
such as working nights or weekends.


• 

Conflict management techniques include changing organizational
structures to avoid built-in conflict, changing team members or
composition of the team, focusing attention from group conflict by
creating a common “enemy”, using majority rules, and using
problem solving by asking individuals to focus on the problem and
not each other.


• 

Conflict management styles include accommodating others,
avoiding the conflict, collaborating, competing, and
compromising. There is no right way to deal with conflict. People
have a dominant style that they tend to use most frequently,
although successful individuals are able to match their style to a
situation.

Module 2 - Managing Negotiations

Learning Outcomes
 • On successful completion of this module, you will be able to: 

◦ Apply the five stages of negotiation to your work or personal

life

◦ Devise negotiation strategies for use at work or in your

personal life

◦ Identify common mistakes that occur in negotiations

◦ Recognize when a third-party negotiator is required to settle a

conflict

◦ Consider the role of ethics when negotiating with others

◦ Review the role of national culture in your negotiations

The Five Stages of Negotiation

Introduction

• Negotiation is a process whereby two or more parties work

toward an agreement. 

• A common way that parties deal with conflict is via negotiation. 


• 

There are five stages of negotiation:


1. I nvestigation

2. Determine your BATNA*

3. Presentation

4. Bargaining

5. Closure

*best alternative to a negotiated agreement

 • Stage 1: Investigation

• The first step in negotiation is the investigation or information
gathering stage. This is a key stage that is often ignored. Surprisingly,
the first place to begin is with yourself:


◦ What are your goals for the negotiation? 

◦ What do you want to achieve? 

◦ What would you concede? 

◦ What would you absolutely not concede? [1]

◦
• Going into the negotiation with your own emotions and thoughts in
check will likely make it a more successful negotiation.

• 

 “You need the clearest possible view of your goals. And you
need to be brutally honest with yourself about your priorities” -
Leigh Steinberg.

• 

During the negotiation, you’ll inevitably be faced with making
choices. It’s best to know what you want, so that in the heat of the
moment you’re able to make the best decision.

Example

If you’ll be negotiating for a new job, ask yourself: “What do I value most?
Is it the salary level? Working with coworkers whom I like? Working at a
prestigious company? Working in a certain geographical area? Do I want a
company that will groom me for future positions or do I want to change
jobs often in pursuit of new challenges?”

• Stage 2: Determine your BATNA


• One important part of the investigation and planning phase is to
determine your BATNA. Thinking through your BATNA is important to
helping you decide whether to accept an offer you receive during
the negotiation. 


• 

You need to know what your alternatives are. If you have various
 alternatives, you can look at the proposed deal more critically. Could
you get a better outcome than the proposed deal? 


• 

Your BATNA will help you reject an unfavorable deal. On the other
hand, if the deal is better than another outcome you could get (that is,
better than your BATNA), then you should accept it. Think about it in
common sense terms: When you know your opponent is desperate
for a deal, you can demand much more. If it looks like they have a lot
of other options outside the negotiation, you’ll be more likely to make
concessions. 


• 

The party with the best BATNA has the best negotiating position,
so try to improve your BATNA whenever possible by exploring
possible alternatives.  [2]


• 

Once you’ve gotten a clear understanding of your own goals, you can
investigate the person you’ll be negotiating with by thinking about
their BATNA. What does that person (or company) want? Put yourself
in the other party’s shoes. What alternatives could they have? 

Example

Greenpeace’s goals are to safeguard the environment by getting large

companies and organizations to adopt more environmentally friendly
practices such as using fewer plastic components. Part of the background
research Greenpeace engages in involves uncovering facts. For instance,
medical device makers are using harmful PVCs as a tubing material
because PVCs are inexpensive. But are there alternatives to PVCs that are
also cost effective? Greenpeace’s research found that there are. Knowing
this lets Greenpeace counter those arguments and puts Greenpeace in a
stronger position to achieve its goals. [3]

• Stage 3: Presentation

• The third phase of negotiation is presentation. In this phase,
you assemble the information you’ve gathered in a way
 that supports your position. 


• 

This phase normally receives the most attention, but the work done
before this phase is equally important.

Example

In a job hiring or salary negotiation situation, you can present facts that
show what you’ve contributed to the organization in the past (or in a
previous position), which in turn demonstrates your value. Perhaps you
created a blog that brought attention to your company or got donations or
funding for a charity. Perhaps you’re a team player who brings out the best
in the group.

Stage 4: Bargaining

Bargaining

During the bargaining phase, each party discusses their goals and seeks
to get an agreement. A natural part of the bargaining stage is making
concessions, namely, giving up one thing to get something in return. 

 One key to the bargaining phase is to ask questions. Don’t simply take a
statement such as “we can’t do that” at face value. 

 Rather, try to find out why the party has that constraint.

Concessions

Making a concession is not a sign of weakness-parties expect to give up

some of their goals. 

Rather, concessions demonstrate cooperativeness and help move the

negotiation towards its conclusion. 

Concessions are often in areas of money, time, resources, responsibilities,

or autonomy.

Example

When negotiating for the purchase of products, you might agree to pay a
higher price in exchange for getting the products sooner. Alternatively, you
could ask to pay a lower price in exchange for giving the manufacturer
more time or flexibility in which they deliver the product. Making a
concession shows forward movement and process, and it allays concerns
about rigidity or closed-mindedness. Concessions are often in areas of
money, time, resources, responsibilities, or autonomy.

As negotiations stall, you evaluate your options to decide what’s more

important: a slightly lower price or a slightly longer delivery date? 

When you hear the shipping problem the manufacturer has, a light bulb
goes off. You know that your firm has favorable contracts with shipping
companies because of the high volume of business the firm gives
them. You make the following counteroffer: 

The manufacturer accepts the offer - the biggest expense and constraint
(the shipping) has been lifted. You, in turn, have saved money as well. [4]

• Stage 5: Closure

• At the close of a negotiation, you and the other party have either
come to an agreement on the terms, or one party has decided that
the final offer is unacceptable and therefore must be walked away
from.


• 

Most negotiators assume that if their best offer has been rejected,
there’s nothing left to do. The savviest of negotiators, however, see
the rejection as an opportunity to learn. “What would it have taken
for us to reach an agreement?”


• 

Sometimes at the end of negotiations, it’s clear why a deal was not
reached. But if you’re confused about why a deal did not happen,
consider making a follow-up call. Even though you may not win the
deal back in the end, you might learn something that is useful for
future negotiations. What’s more, the other party may be more willing
to disclose the information if they don’t think you’re in a “selling”
mode. 

Example

Recently, a CEO had been in negotiations with a customer. After learning

the customer decided to go with the competition, the CEO decided to
inquire as to why negotiations had fallen through. With nothing left to lose,
the CEO placed a call to the prospect’s vice president and asked why the
offer had been rejected, explaining that the answer would help improve
future offerings. The VP explained the deal was given to the competitor
because, despite charging more, the competitor offered after-sales service
on the product. The CEO was taken by surprise, originally assuming that
the VP was most interested in obtaining the lowest price possible. In order
to accommodate to a very low price, various extras such as after-sales
service had been cut from the offer. Having learned that the VP was
seeking service, not the lowest cost, the CEO said, “Knowing what I know
now, I’m confident that I could have beaten the competitor’s bid. Would
you accept a revised offer” The VP agreed, and a week later, the CEO had
signed a contract.

• Bibliography

• [1] Webber, A. (1998, October). How to get them to show you the
money. Fast Company, 198. Retrieved November 14, 2008, from
<http://www.fastcompany.com/magazine/19/showmoney.html>.


• 

[2] Pinkley, R.L. (1995). Impact of knowledge regarding alternatives to
settlement in dyadic negotiations: Whose knowledge counts? Journal
of Applied Psychology, 80, 403-17.


• 

[3] Layne, A. (1999, November). Conflict resolution at Greenpeace?
Fast Company. Retrieved November 14, 2008, from <http://
www.fastcompany.com./articles/1999/12/rick_hind.html>.


• 

[4] Malhotra, D., & Bazerman, M. H. (2007, September). Investigative
negotiation. Harvard Business Review, 85, 72.

Negotiation Strategies and Avoiding Common

Mistakes
Negotiation Strategies

• Distributive Approach


• The distributive view of negotiation is the traditional fixed-pie

approach. That is, negotiators see the situation as a pie that they
have to divide between them. 

 • 

Each tries to get more of the pie and “win”.

Example

Managers may compete over shares of a budget. If marketing gets a 10

percent increase in its budget, another department such as R&D will need
to decrease its budget by 10 percent to offset the marketing increase.
Focusing on a fixed pie is a common mistake in negotiation, because this
view limits the creative solutions possible.

• Negotiation Strategies
• 


• Integrative Approach


• A newer, more creative approach to negotiation is called the

integrative approach. In this approach, both parties look for ways to
integrate their goals under a large umbrella. That is, they look for
ways to expand the pie, so that each party gets more. This is also
called a win-win approach. 

Step One

The first step of the integrative approach is to enter the negotiation from a
cooperative rather than an adversarial stance. 

Step Two

The second step is all about listening. Listening develops trust as each

party learns what the other wants and everyone involved arrives at a
mutual understanding. 

Step Three

Then, all parties can explore ways to achieve the individual goals. The
general idea is, “If we put our heads together, we can find a solution that
addresses everybody’s needs.” 

Statistics

Unfortunately, integrative outcomes are not the norm. A summary of thirty-

two experiments on negotiations found that although they could have
resulted in integrated outcomes, only 20 percent did so.  [1]

• Failing to Negotiate/Accepting the First Offer


• Some people are taught to feel that negotiation is a conflict situation,
and these individuals may tend to avoid negotiations to avoid
conflict. 


• 

Research shows that this negotiation avoidance is especially
prevalent among women. Researchers calculate that people who
routinely negotiate salary increases will earn over $1 million more by
retirement, than people who accept an initial offer every time without
asking for more. [2]


• 

The good news is that it is possible to increase negotiation efforts and
confidence by training people to use effective negotiation skills. [3]

Example

You may have heard that women typically make less money than men.
Researchers have established that about one-third of the gender
differences observed in the salaries of men and women can be tracked
back to differences in starting salaries, with women making less, on
average when they start their jobs. [4] For example, one study looked at
students from Carnegie-Mellon who were getting their first job after
earning a master’s degree. The study found that only 7 percent of the
women negotiated their offer, while men negotiated 57 percent of the time.
[5]

• Letting Your Ego Get in the Way


• Thinking only about yourself is a common mistake and can be a
disadvantage during negotiations. Instead, think about why the
other person would want to accept the deal. 


• 

People aren’t likely to accept the deal that doesn’t offer any benefit to
them. Help them meet their own goals while you achieve yours. 


• 

Integrative outcomes depend on having good listening skills, and if
you are thinking only about your own needs, you may miss out on
important opportunities. 


• 

Remember that a good business relationship can only be created and
maintained if both parties get a fair deal.

• Having Unrealistic Expectations


• Those who set unreasonable expectations are more likely to fail. 


• 

Susan Podziba, a professor of mediation at Harvard and MIT, plays
broker for some of the toughest negotiations around, from public
policy to marital disputes. She takes an integrative approach in the
negotiations, identifying goals that are large enough to encompass
both sides. 

• Getting Overly Emotional


• Some researchers have found that those who express anger
negotiate worse deals than those who do not. [7]

In a study of online negotiations, words such as despise, disgusted,
furious, and hate were related to a reduced chance of reaching an
agreement. [8]


• 

However, this finding may depend on individual personalities.
Research has also shown that those with more power may be more
effective when displaying anger. 


• 

The weaker party may perceive the anger as potentially signaling that
the deal is falling apart and may concede items to help move things
along. This holds for online negotiations as well.  [9]


• 

Another aspect of getting overly emotional is forgetting that facial
 expressions are universal across cultures. When your words and
facial expressions don’t match, you are less likely to be trusted. [10]

Example

A study of 355 eBay disputes were examined in which mediation was

requested by one or both of the parties. Overall, anger hurts the mediation
process unless one of the parties was perceived as much more powerful
than the other party, in which case anger hastened a deal. [11]

• Letting Past Negative Outcomes

Affect the Present Ones

• Research shows that negotiators who had previously experienced
ineffective negotiations were more likely to have failed negotiations in
the future. 


• 

Those who were unable to negotiate some type of deal in previous
negotiation situations tended to have lower outcomes than those who
had successfully negotiated deals in the past. [12]


• 

The key to remember is that there is a tendency to let the past repeat
itself. 


• 

Being aware of this tendency allows you to not be overly swayed by
past experiences, especially while you are starting out as a negotiator
and have limited experiences.

• Bibliography

• [ 1] Thompson, L., & Hrebec, d. (1996). Lose-lose agreements in
interdependent decision making. Psychological Bulletin, 210,
386-409.

• 

[2] Babcock, L., & Lascheve, S. (2003). Women don’t ask:
Negotiation and the gender divide. Princeton, NJ: Princeton
University Press.


• 

[3] Stevens, C.K., Bavetta, A.G., & Gist, M.E (1993). Gender
differences in the acquisition of salary negotiation skills: the tole of
goals, self-efficacy, and perceived control. Journal of Applied
Psychology, 78, 723-35. 


• 

[4] Gerhart, B. (1990). Gender differences in current and starting
salaries: the role of performance, college major, and job title.
Industrial and Labor Relations Review, 43, 418-33. 


• 

[5] CNN. (2003, August 21). Interview with Linda Babcock. Retrieved
November 14, 2008, from <http://transcripts.cnn.com/
TRANSCRIPTS/0308/21/se.04.html>.


• 

[6] Rothenberger, C. (2008, September 11). Negotiation 201: Refine
your skills. Fast Company. Retrieved January 11, 2008, from <http://
www.fastcompany.com/articles/team/prob_podziba.html>.


• 

[7] Kopelman, S., Rosette, A.S., & Thompson, L. 920060. The three
faces of Eve: An examination of the strategic display of positive,
negative, and neutral emotions in negotiations. Organizational
behavior and human decision processes, 99, 81-101.


• 

[8] Brett, J.M., Olekalns, M., Friedman, R., Goates, N., Anderson, C.,
& Lisco, C.C. (2007). Sticks and stones: Language, face, and online
dispute resolution. Academy of Management Journal, 50, 85-99.


• 

[9] Van Kleef, g.A., & Cote, S. (2007). Expressing anger in conflict:
When it helps and when it hurts. Journal of Applied Psychology, 92,
 1557-69. 


• 

[10] Hill, D. (2007). Emotionomics: Winning hearts and minds. Edina,
MN: Adams Business & Professional; Holloway, L. (2007, December).
Mixed signal: Are you saying one thing, while your face says
otherwise? Entrepreneur, 35, 49.


• 

[11] Friedman, R., Anderson, C., Brett, J., Olekalns, M., Goates, N., &
Lisco, C.C. (2004). The positive and negative effects of anger on
dispute resolution: Evidence from electronically mediated disputes.
Journal of Applied Psychology, 89, 368-76.

[12] O’Connor, K.M., Arnold, J.A., & Burris, E.R. (2005). Negotiators’
bargaining histories and their effects on future negotiation performance.
Journal of Applied Psychology, 90, 350-62. 

Third-Party Negotiations
Alternative Dispute Resolution

Alternative Dispute Resolution (ADR) includes mediation, arbitration, and

other ways of resolving conflicts with the help of a specially trained,
neutral third party without the need for a formal trial or hearing. [1]

Many companies find this effective in dealing with challenging problems. 

For example, Eastman Kodak Company added an alternative dispute

resolution panel of internal employees to help them handle cases of
perceived discrimination and hopefully stop a conflict from escalating. [2]

• Mediation

 • “Even if there is no agreement reached in mediation, people are
happy that they engaged in the process. It often opens up the
possibility for resolution in ways that people had not anticipated.” [4]

Mediation

In mediation, an outside third party (the mediator) enters the situation with
the goal of assisting the parties in reaching an agreement.

One of the advantages of mediation is that the mediator helps the parties
design their own solutions, including resolving issues that are important to
both parties, not just the ones under specific dispute. The mediation
process is strictly confidential. [3]

Interestingly, sometimes mediation solves a conflict even if no resolution is

reached. 

Mediator

The mediator can facilitate, suggest, and recommend. The mediator works

with both parties to reach a solution but does not represent either side.

Rather, the mediator’s role is to help the parties share feelings, air and
verify facts, exchange perceptions, and work toward agreements. A
mediator does not resolve the charge or impose a decision on the parties.
Instead, the mediator helps the parties to agree on a mutually acceptable
resolution. 

When is a Mediator Required?

It’s time for a mediator when:

The parties are unable to find a solution themselves.

Personal differences are standing in the way of a successful solution.

The parties have stopped talking with one another.

Obtaining a quick resolution is important. [5]

 • Arbitration

• In contrast to mediation, in which parties work with the mediator to
arrive at a solution, in arbitration, the parties submit the dispute to the
third-party arbitrator. 


• 

The arbitrator makes the final decision.


• 

The arbitrator is a neutral third party, but the decision made by the
arbitrator is final (the decision is called the “award”). Awards are
made in writing and are binding to the parties involved in the case. [6]

• Arbitration-Mediation

• It is common to see mediation followed by arbitration. An alternative
technique is to follow the arbitration with mediation. The format of this
conflict resolution approach is to have both sides formally make their
cases before an arbitrator. The arbitrator then makes a decision and
places it in a sealed envelope. 


• 

Following this, the two parties work through mediation. If they are
unable to reach an agreement on their own, the arbitration decisions
become binding. It is common to see mediation followed by
arbitration. An alternative technique is to follow the arbitration with
mediation. The process of this technique is as follows:

1- Process

The format of this conflict resolution approach is to have both sides

formally make their cases before an arbitrator.

2 - Evaluation

The arbitrator then makes a decision and places it in a sealed envelope.

3- Mediation Phase

Following this, the two parties work through mediation.

4- Result

If they are unable to reach an agreement on their own, the arbitration

decisions become binding.

◦ 


• Researchers using this technique found that it led to voluntary

agreements between the two parties 71 percent of the time versus
50 percent for mediation followed by arbitration. [7]

• Self-Directed Learning

6. W hat are the negotiation phases and what goes on during each
of them?

7. When negotiating, is establishing a BATNA important? Why or

why not?

8. What are the third-party conflict resolution options available?

• Key Points

◦ egotiation consists of five phases that include investigation,
N
determining your BATNA, presentation, bargaining, and
closure. 

 ◦ ifferent negotiation strategies include the distributive

D
approach (fixed-pie approach) and the integrative approach
(expanding-the-pie approach)

◦ Research shows that some common mistakes made during

negotiations include accepting the first offer made, letting egos
get in the way, having unrealistic expectations, getting overly
emotional, and letting past negative outcomes affect the
present ones.

◦ Third-party negotiators are sometimes needed when two sides

cannot agree.

• Bibliography

• [ 1] New York State Unified Court System. (2008, October 28).
Alternative dispute resolution. Retrieved November 14, 2008, from
<http://www.courts.state.ny.us/ip/adr/index.shtml>.


• 

[2] Deutsch, C. H. (2004, August 24). Race remains a difficult issue
for many workers at Kodak. New York Times.


• 

[3] The US Equal Employment Opportunity Commission. (2007,
December 4). Mediation. Retrieved November 13, 2008, from <http://
www/eeoc.gov/employees/mediation.cfm>.


• 

[4] Layne, A. (1999, November). Conflict resolution at Greenpeace?
Fast company. Retrieved November 11, 2008, from <http://
www.fastcompany.com/article/1999/12/rick_hind.html>.


• 

[5] Crawley, J. (1994). Constructive conflict management. San Diego:
Pfeiffer; Mache, K. (1990). Handbook of dispute resolution:
Alternative dispute resolution in action. London: Routledge. 


• 

[6] American Arbitration Association. (2007). Arbitration and
mediation. Retrieved November 11, 2008, from <http://www.adr.org/
 arb_med>.


• 

[7] Conlon, D. E., Moon, H., & Ng, K. Y. (2002). Putting the cart before
the horse: The benefits of arbitrating before mediating. Journal of
Applied Psychology, 87, 978-84. 

Ethical and Cross-Cultural Negotiations

Ethics and Negotiations

• re hardball tactics OK to use? Sometimes a course of action is

A
legal but is questionable in terms of ethics. A good rule of thumb is
that hardball tactics should not be used because the negotiation is
likely not to be the last time you interact with the other party. 


• 

Therefore, finding a way to make a deal that works for both sides is
preferable. Otherwise, if you have the complete upper hand and use
it to “destroy” the other party, it’s likely that at a future date the other
party will have the upper hand and will use it to retaliate mercilessly
against you. What’s more, your reputation as a negotiator will suffer. 


• “My father said: ‘You must never try to make all the money that’s
in a deal. Let the other fellow make some money too, because if
you have a reputation for always making all the money, you
won’t have many deals"' - J. Paul Getty [1]


• thics establish a way of doing what is right, fair, and honest. If your
E
counterpart feels you are being unfair or dishonest, he or she is less
likely to make any concessions - or even to negotiate with you in the
first place. 

 • Tips for ethical negotiations:


◦ Be honest

◦ Keep your promises

◦ Follow the Platinum Rule

◦
• The Golden Rule tells us to treat others the way we want to be
treated. Author Tony Alessandra goes a step further with the
Platinum Rule: “Treat people the way they want to be
treated.” Caring about others enough to treat them the way they
want to be treated helps build long-term relationships based on
ethics and trust. [2]

• Negotiation around the Globe


• Not understanding cultural differences is another common
mistake. Some cultures have a higher or lower threshold for conflict.


• 

In a study of Japanese, German, and American cultures, it was found
that almost half of the preference for different conflict management
styles was related to the country in which participants were raised. [3]

Example

Lower threshold for conflict: In countries such as Japan or Korea, the

preference is for harmony (called wa in Japan) rather than overt conflict. [4]
Higher threshold for conflict: Americans and Germans have a much higher
tolerance for conflict as a way of working through issues.

In Japan, much like Pakistan, the tendency is not to trust what is heard
from the other party until a strong relationship is formed. 

Similarly, in China, conversations start out with innocuous topics to set a

mood of friendliness.  

This differs a great deal from American negotiators who tend to like to “get
down to business” and heavily weigh first offers as reference points that
anchor the process as both sides make demands and later offers. [5]

 • Negotiation around the Globe


• There are also differences in how individuals from different cultures
use information and offers during the negotiation process. Japanese
negotiators tend to use offers as an information exchange process
while American negotiators tend to reveal more information than their
Japanese counterparts. [6]


• 

Japanese negotiators might learn little from a single offer, but patterns
of offers over time are interpreted and factored into their negotiations.
Since Japan is a high-context culture, information is learned from
what is not said as well as from what is said. [7]


• 

Even the way that negotiations are viewed can differ across
cultures. Also keep in mind what agreement means in different
cultures. “Culturally, Chinese companies and workers do not like to
say no,” says a buyer at a manufacturer based in the United
States. Instead of phrasing a questions as, “Can you do this for
us?” which would put the Chinese official in an uncomfortable
position of saying no (which they likely would not do), rephrase the
questions as, “How will you do this for us and when will it be
done?” [9]

Example

he Western cultures tend to think of negotiations as a business activity

rather than a social activity, but in other cultures, the first step in
negotiations is to develop a trusting relationship. Negotiators in Brazil, for
example, seriously damaged relationships when they tried to push
negotiations to continue during the Carnival festival. The locals took that
as a disrespectful action and it took several weeks to restore confidence
and move on. [8] In China, nodding of the head does not mean that the
Chinese counterpart is agreeing to what you are proposing, merely that
they are listening and following what you are saying.

• Self-Directed Learning

9. I s the goal of negotiation to maximize your economic outcome
at all costs? Why or why not? Is it ethical to do so?

10. What are some similarities and differences in conflict

management preference and negotiation practices among
different countries around the globe? Have you had any
experiences with individuals from other cultures? If so, how did
it go? How might it have gone better?

• Key Points

◦ eing honest during negotiations, keeping your promises, and
B
treating others as you would like to be treated all help you
negotiate ethically.

◦ Not understanding the culture of a person or group of people

you are negotiating with can be a major mistake.

◦ Try to learn as much as you can about the culture of others

involved and be sure to clarify key points along the way.

◦ Also, keep in mind that agreement (e.g., nodding one’s head

up and down or saying “yes, yes”) may not mean the same
thing in all cultures.

• Bibliography

• [1] Know the Web LTD (2002-2015). Money Quotes, Said What.
Retrieved January 29, 2009, from <http://www/>.saidwhat.co.uk/
keywordquotes/money.


• 

[2] Stark, P. B., & Flaherty, J. (2003). Ethical negotiations: 10 tips to
ensure win-win outcomes. Negotiator Magazine. Retrieved November
11, 2008, from <http://www.negotiatormagazine.com/
showarticle.php?file=article106&page=1>. 


• 

[3] Tinsley, C. (1998). Models of conflict resolution in Japanese,
German, and American cultures. Journal of Applied Psychology, 83,
 316-23. 


• 

[4] Lebra, T. S. (1976). Japanese patterns of behavior. Honolulu, HI:
University Press of Hawaii.


• 

[5] US Commerce Department. (2007). Retrieved November 11, 2008,
from <http://www.Buyusa.gov/>.


• 

[6] Adair, W. L., Weingart, L., & Brett, J. (2007). The timing and
function of offers in the US and Japanese negotiations. Journal of
Applied Psychology, 92, 1056-68.


• 

[7] Adair, W. L., Okumua, T., & Brett, J. M. (2001). Negotiation
behavior when cultures collide: The United States and Japan. Journal
of Applied Psychology, 86, 371-85.  


• 

[8] Teague, P. E. (2006, August 17). Collaboration trumps negotiations.
Purchasing, 135(11), 58. 


• 

[9] Hannon, D. (2006, May 18). DO’s and DON’Ts of doing business in
China. Purchasing, 135(8), 52. 

Negotiation Tips

Should you Negotiate for a Higher Salary?

 •   “Salary negotiation has become a growing opportunity in the

job acquisition 

   process, candidates who fail to make a counteroffer could
forfeit significant 

   income” - Bill Hawkins, president and CEO of the Hawkins
company, a full-service executive search firm with offices in Los
Angeles and Atlanta. [1]

According to a survey conducted by CareerBuilder.com, 58% of hiring

managers say they leave some negotiating room when extending initial job
offers. 

The survey also found that many of the hiring managers agree to a
candidate’s request for a higher salary. 

Seven Steps to Negotiating for a Higher Salary

Step 1 - Overcome your Fears

▪ - Many people don’t even begin a salary negotiation. We may be

afraid of angering the boss or think that because we are doing a
good job, we’ll automatically be rewarded.

▪
▪ - But just because you’re doing a good job doesn’t mean you’ll
automatically get a raise. Why? If you don’t ask for one, the boss
may believe you’re satisfied with what you’re getting. So why should
he pay you more?

▪
▪ - Imagine going into a car dealership and begin absolutely delighted
with a car choice. The sticker price is $19,000. Would you pay the
dealer $23,000 just because you really like the car? Of course not.
You probably wouldn’t even offer $19,000. If the car was up for
auction, however, and another bidder offered $20,000, you’d likely
increase your offer, too.

▪
▪ - That’s what salary negotiation is like. Your boss may be thrilled with
you but at the same time is running a business. 

▪
 ▪ - There’s no reason to pay an employee more if you seem satisfied
with your current salary.

Step 2 - Get the Facts

- Before you enter into the negotiation, do some background research.

What are other companies paying people in your position? 

- Check sites such as Payscale.com, Salary.com, and Salaryexpert.com to

get a feel for the market. 

- Look at surveys conducted by your professional organization. 

Step 3 - Build your Case

- How important are you to the organization? How have you contributed?
Perhaps you contributed by increasing sales, winning over angry
customers, getting feuding team members to cooperate, and so on. 

- Make a list of your contributions. Be sure to focus on the contributions

that your boss values most. Is it getting recognition for the department?
Easing workload? If another employer has shown interest in you, mention
that as a fact. However, don’t use this as a threat unless you’re prepared
to take the other offer. 

- Mentioning interest from another employer gets the boss to think, “If I
don’t give this raise, I may lose an employee” (If you don’t feel you have a
strong case for a raise, perhaps this isn’t the time to ask for one.)

Step 4 - Know what you Want

- Set your target salary goal based on your research and the norms of
what your organization will pay. 

- Now ask yourself, if you don’t get this figure, would you quit? 

- If not, are there other alternatives besides a salary increase that you’d
consider? For example, would you accept a higher title? More vacation
time? Paid training to learn a new skill? Flexible hours?

Step 5 - Begin Assertively

- Start the discussion on a strong but friendly tone.  “I think I’m worth more
than I’m being paid”

- List the ways you’ve contributed to the company

Step 6 - Don’t Make the First Offer

- Let your boss name the figure. You can do this by asking, “How much of
a raise could you approve?” 

However, if the boss insists that you name a figure, ask for the most that
you can reasonably expect to get.

- You want to be reasonable, but you need to allow room to make a

concession. 

- Your boss will assume your opening number was high and will offer you
less, so asking for the actual figure you want may leave you feeling
disappointed. 

- If the boss opens with. “The salary range for this position is $66,000 to
$78,000” ask for the high end. 

- If your goal was higher than that range, challenge the range by explaining
how you are an exception and why you deserve more.

Step 7 - Listen more than Talk

- You’ll learn more by listening rather than talking. 

- The more you listen the better the boss will feel about you - people tend
to like and trust people who listen to them. 

- If you can’t get a raise now, get your boss to agree to one in a few
months if you meet agreed-upon objectives. [2]

Tips for Negotiation Success

Focus on Agreement First

If you reach an impasse during negotiations, sometimes the best recourse

is to agree that you disagree on those topics and then focus only on the
ones that you can reach an agreement on.

 Summarize what you’ve agreed on, so that everyone feels like they’re
agreeing, and leave out the points you don’t agree on. Then take up those
issues again in a different context, such as over dinner or coffee. Dealing
with those issues separately may help the negotiation process.

Be Patient

If you don’t have a deadline by which an agreement needs to be reached,

use that flexibility to your advantage. 

The other party may be forced by circumstances to agree to your terms,

so if you can be patient you may be able to get the best deal.

Whose Reality?

During negotiations, each side is presenting their case-their version of

reality. Whose version of reality will prevail? 

Example:

When Leigh Steinberg was negotiating the salary of Warren Moon for the
NFL, Moon was forty-one years old. That was a fact. Did that mean he
was hanging on by a thread and lucky to be employed in the first place? 

“Should he be grateful for any money that the team pays him?” 

Steinberg posed,

 “Or is he a quarterback who was among the league leaders in

completions and attempts last year? Is he a team leader who took a
previously moribund group of players, united them, and helped them have
the best record that they’ve had in recent years?” 

All those facts are true, and negotiation brings the relevant facts to the
forefront and argues their merit. 

Deadlines

Research shows that negotiators are more likely to strike a deal by making
more concessions and thinking more creatively as deadlines loom than at
any other time in the negotiation process.

Be Comfortable with Silence

After you have made an offer, allow the other party to respond. 

Many people become uncomfortable with silence and feel they need to
say something. 

Wait and listen instead. [3]

• Bibliography

• [1] Reed-Woodard, M. (2007, April). Taking money off the table. Black
Enterprise, 37(9), 60-61.


• 

[2] Brodow, E. (2006). Negotiation boot camp. New York: Currency/
Doubleday; Nemko, M. (2007, December 31). The general way to get
a raise. US News & World Report, 57. 


• 

[3] Stuhlmacher, A. F., Gillespie, T. L., & Champagne, M. V. (1998). The
 impact of time pressure in negotiation: A meta-analysis. International
Journal of Conflict Management, 9, 97-116; Webber, A. (1998,
October). How to get them to show you the money. Fast Company.
Retrieved November 13, 2008, from http://www.fastcompany.com/
magazine/19/showmoney.html.

Negotiations - Lesson Summary

• The key points from this module are the following:

• Negotiations occur during many important processes, and

possessing astute negation skills can be an incredible tool. A key
component to negotiations involves having a BATNA, or “best
alternative to a negotiated agreement.”  

• 

Negotiations typically move through five phases, including
investigation, determining your BATNA, presentation, bargaining, and
closure. During a negotiation, it is important not to make any number
of common mistakes. 


• 

These mistakes can include:

• 


◦ ccepting the first offer.

a
◦ letting ego get in the way.

◦ having unrealistic expectations of the outcome of the

negotiation.

◦ becoming too emotional during the process.

◦ being weighed down by previous failures and letting the past

repeat itself.

◦
• Third-party negotiators, such as a mediator or arbitrator, are
sometimes needed to resolve conflict when two sides cannot agree
to a solution. Ethics establish a way of doing what is right, fair, and
honest. Your counterpart may not negotiate or make concessions
with you if they feel you are being unfair or dishonest. It is important
to keep in mind that many cultures have preferential methods for
handling conflict and negotiation. Individuals should understand the
 cultural background of others to better navigate what could
otherwise become a messy situation. 

Module 3 - Introduction to Alternative Dispute

Resolution

Alternative Dispute Resolution - Learning

Outcomes

• On successful completion of this module, you will be able to: 

◦ Define what alternative dispute resolution (ADR) is

◦ Identify the benefits of using ADR

◦ Describe the national principles of resolving dispute resolution

◦ Describe the role of an ADR practitioner

◦ Explain various aspects of preparing for ADR

◦ Identify the level of confidentiality in ADR

Introduction to Alternative Dispute Resolution

(ADR)

Scenario

Imagine that you’ve been wronged by a supplier, by your employer, or by a

business where you are a customer. You’ve correctly determined that you
have an actionable legal claim. What are you going to do?

You probably won’t run to the courthouse to file a formal complaint to

initiate litigation. This is because litigation is very expensive and time
consuming. Besides, you may wish to continue doing business with the
supplier, employer, or business.

Perhaps the matter is of a private nature, and you do not want to engage
in a public process to determine the outcome. You would like the dispute
to be resolved, but you do not want to engage in public, time consuming,
expensive litigation to do it.

A common method of dispute resolution that avoids many of the

challenges associated with litigation is alternative dispute resolution (ADR).

• What is ADR?


• ADR involves resolving disputes outside of the judicial process,

though the judiciary can require parties to participate in specific
types of ADR, such as arbitration, for some types of conflicts.

• Moreover, some ADR methods vest power to resolve the dispute in a

neutral party, while other strategies vest that power in the parties
themselves. 


• 

Common methods of ADR include negotiation, mediation, and
arbitration. 


• 

Lesser used methods of ADR include mini-trials, hybrid forms of
mediation-arbitration (with elements of both), and collaborative goal-
oriented processes. 

• When is ADR used?


• ADR is often used to resolve disputes among businesses, employers
and employees, and businesses and consumers. ADR can also be
used in many other types of conflicts. For instance, ADR strategies
can be used in domestic law cases, such as divorce, or in
international legal issues, such as issues relating to trans-boundary
pollution. ADR methods are used outside of the courtroom, but that
 does not mean that they are outside of the interests of our legal
system. 

Participation in ADR has important legal consequences. For instance,

parties that have agreed by contract to be subject to binding arbitration
give up their constitutional right to bring their complaint to court.

The Federal Arbitration Act (FAA) is a federal statute under which parties
are required to participate in arbitration when they have agreed by contract
to do so, even in state court matters. Indeed, the FAA is a national policy
favoring arbitration. 

Example

The Southland Corp. Court said that “in enacting…[the FAA], Congress
declared a national policy favoring arbitration and withdrew the power of
the states to require a judicial forum for the resolution of claims which the
contracting parties agreed to resolve by arbitration.” This is an example of
federal preemption exercised through the Supremacy Clause in the U.S.
Constitution.

• ADR and You


• There is a very good chance that you will—or already have—signed a
contract that contains a mandatory arbitration clause. This means
that if a dispute arises under that contract, then you will be required
to arbitrate your claim rather than going straight to court. Under a
binding arbitration clause, you will have waived your constitutional
rights to go to court.


• 

Even if you have never signed such a contract and never will, there is
still a good likelihood that you will be involved in a commercial
dispute at some point in your life. Because of this, it’s important to
understand the ADR process, situations in which litigation is a better
choice than ADR, and special issues that arise when parties have
unequal bargaining power.

• ADR Practitioners

• Each ADR process is different. The amount of time an ADR process
takes changes depending on the type of process and the details of
your dispute. ADR practitioners are trained to help you and the other
people involved to work toward a solution. The role of an ADR
practitioner is different depending on the type of ADR process. 


• 

In some ADR processes, the practitioner can give advice or make
decisions for you.You should choose the ADR process that sounds as
if it will work for you. 


• 

Using ADR can: 




◦ elp you to resolve all or some of the issues in your dispute.

h
◦ provide a fair process.

◦ help you to achieve outcomes that work for everyone involved

in the dispute.

 • Why choose ADR?


• Resolving your dispute through ADR is different from asking a court
or tribunal to resolve your dispute. Using ADR to resolve your dispute
can benefit everyone. It means that courts and tribunals can spend
their time considering disputes that need a court or tribunal decision. 

Flexibility

ADR processes can be flexible, because the process can be made to suit
your particular dispute. 

   -Court processes are generally less flexible. 

Privacy and Confidentiality

ADR processes and outcomes are usually private and confidential.

   -Hearings and decisions of courts and tribunals (including the reasons

for the decision) are usually public. 

Self-Directed

In an ADR process you and the other people involved usually choose who
the ADR practitioner is. You can also agree about some of the things the
ADR practitioner can do. 

   -When you use a court or tribunal, a decision-maker (such as a judge) is

appointed for you. What                            the decision-maker can do is
based on the law. 

In an ADR process you and the other people involved decide on the
outcome of the process. 

   -Courts and tribunals usually control the outcomes of court and tribunal
processes. 

In an ADR process you may be able to participate without a lawyer’s

assistance. 

   -You may find a court process difficult without a lawyer. 

ADR processes mean you and the other people involved choose what
issues to raise. In a court process, you can only raise issues that are
connected with your legal rights.

Cost

ADR processes can be less expensive than other ways of resolving your
dispute.

   -Going to a court can be very expensive. Tribunals can be less expensive

but can still involve hearings and             legal costs if you are represented.

   -There are also costs in time and effort to think about. 

Focus

ADR processes and outcomes focus on what is important to you and the
other people involved. 

   -Courts and tribunals focus on legal rights. 

ADR processes may help you and the other people involved to maintain
relationships. 

Outcomes

 Outcomes of a dispute can be your agreement or someone else’s

decision. 

   -When you use an ADR process the outcome can be reaching

agreement. 

   -When you go to court the outcome will be a judgment. 

 For many people outcomes are made up of at least two parts. One part is
the practical agreement. Another part is your relationship with the people
involved in the agreement. 

   -Courts can only reach an outcome that fits the legal facts to the law.
Sometimes this can fit your situation          well; sometimes the legal facts
and the law fit only part of your situation. 

   -ADR processes provide the opportunity for you to cooperate to reach

an outcome that suits everyone. 

   -A court does not to try to suit everyone.

Agreements can sometimes restore or maintain or even improve your

relationships with the other people involved. 

   -Court proceedings can often end relationships with the other people
involved. 

You and the other people involved may be more confident that everyone
will do what was agreed, because everyone contributes to the outcome.

   -Outcomes imposed by courts and tribunals are sometimes taken back

to court (appealed) because people         are dissatisfied. 

Even if court or tribunal proceedings have started, you should not give up
on ADR. You might still get significant benefits by using ADR rather than
proceeding to a court or tribunal hearing.  

Less Formal

ADR processes can be informal.

   -Court and tribunal hearings can be very formal. 

Skills

ADR processes may help you and the other people involved to learn new
skills and ideas so that you can prevent future disputes or resolve them
earlier. 

• What are the National Principles for Resolving

Disputes?

• NADRAC’s National Principles for Resolving Disputes are about
using ADR when you have a dispute instead of going to court—and
still using ADR even if you do go to court. They also offer information
about how ADR aims to work so that you know what to expect if you
choose to use ADR. 



There are 7 national principles:

National Principle 1

Self-responsibility is the first step.

To resolve your dispute, you need to take responsibility for: 

• being clear about what is in dispute 

• genuinely trying to resolve the dispute 

• seeking support when you need it

National Principle 2

Early resolution is good resolution 

Resolve your dispute in the simplest and most cost effective way, and as
early as you can. You can still use ADR processes if you go to court. 

National Principle 3

Listen and participate 

Show your commitment to the dispute resolution process by listening to

other views and by putting forward and considering options to resolve
your dispute. 

National Principle 4

Be informed when choosing an ADR process 

Seek out and use information to help you: 

• understand what to expect from different processes and service

providers 

• choose an appropriate dispute resolution process. 

National Principle 5

Use ADR, then the courts 

Try to reach an agreement through ADR processes first. If you are unable
to resolve your dispute through ADR, then think about using courts or
tribunals. 

National Principle 6

Ask questions about ADR 

Ask about and expect effective, affordable and professional ADR services
that meet acceptable standards. 

National Principle 7

Share knowledge about ADR accurately 

Describe dispute resolution processes consistently to help other people

understand and be confident about using ADR. 

Preparing for ADR - Questions, Support, and

Roles

• Questions to Ask Your ADR Practitioner


• Your ADR practitioner can tell you what to expect from your ADR
session and how you can prepare for it. This can help you to get the
most out of it. You can ask questions at any time in an ADR process.

How and When my ADR Session be Run?

You and the other participants may attend a session in person or online.
You may also attend an ADR session together or separately. The session
could be run over several hours, one day, or over several days. 

If you are meeting in person, you can discuss the set up of the room and
location with your ADR practitioner. You could ask where you and the
other participants will sit and let the ADR practitioner know if you have any
special needs that need to be taken into account in choosing a location. 

Who can Attend my ADR Session?

If you have them, you and the other participants may want to bring to the
ADR session your: 

• support people             • legal representatives                  • expert

advisers. 

Often it is up to the ADR practitioner to decide if it will help the ADR

process to have more people present, so if you want to bring someone,
ask your ADR practitioner before your session. 

What is expected of me in the ADR Session?

Your ADR practitioner may expect you to put forward your own ideas
about how to resolve the dispute. They will expect that you are willing to
listen to the other people involved and be cooperative and calm. Your ADR
practitioner may stop the ADR session if you or the other participants find
it difficult to listen or participate calmly. 

Can my ADR Practitioner Give me Advice on Issues?

Ask your ADR practitioner about what advice they can and cannot
give. This way you will have enough time to prepare and seek appropriate
advice from lawyers and other experts. 

What if I’m Worried about My or Someone Else’s Safety?

You can raise any safety concerns you have with your ADR practitioner
before and/or during the ADR session. Your ADR practitioner might: 

• arrange for you and the other participants to be in separate rooms during
the ADR process 

• arrange a teleconference 

• advise you that ADR is not appropriate in your situation.

How much the ADR Session Costs?

If you are concerned about the cost of the ADR process, you could ask
about financial assistance or whether you can work out a payment
plan. You could also ask: 

• whether your ADR practitioner is going to charge a fee 

• whether you have to pay other costs, such as renting the location used 

• how any costs will be shared between you and the other participants. 

• Support in Dispute Resolution


• Support People Generally


• Some people prefer to have a support person with them in dispute

resolution processes, particularly ADR processes; some do not. 


• A support person can add value for all the people involved in
resolving the dispute. If you ask someone to be your support person,
it is best if they are not directly involved in the dispute. 


• 

 If you want to have a support person with you during your ADR
process you will need to talk to your ADR practitioner to make sure
this is okay. 


• A support person is someone who can: 

• • give you emotional and practical support 

• help you understand the issues in dispute and what is important to
you 

• gently challenge you if you get stuck on one idea 

• take notes or remind you later of things said. 


•  Your support person could be: 


• a family member 

 • a friend 

• a work colleague 

• a social worker 

• a union representative 

• a counseling psychologist 

• a professional adviser (for example, your lawyer, accountant,
financial adviser, or financial counselor).

• Support in Dispute Resolution


• Lawyers


• A lawyer may be able to help you resolve your dispute, whether you
choose to use an ADR process, an ombudsman, or go to a court or
tribunal. 

• 

It is up to you to decide what you want a lawyer to do for you. If your
lawyer cannot help you with something, they will tell you so. 


• Lawyers in ADR process:


• Some ADR processes involve lawyers; some do not. Lawyers can

give you advice before and after each ADR session, as they may not
be present or may take a ‘backseat’ role during the session. They can
also give you advice after the ADR session about what can happen
next and how the proposed agreement will work for you. You decide
what to do after listening to your lawyer.

• 


• Lawyers in court or tribunals:


• A lawyer’s role in a court or tribunal process is more formal than their

role in an ADR process. You can choose whether you just want advice
from your lawyer, or whether you want them to present your case to
the court or tribunal as well. You may choose to present your own
case to the court or tribunal. Some courts and many tribunals have
user-friendly processes to help you. You decide what to do after
listening to your lawyer.

• Your Role in ADR


• ADR processes are different and your role can be different
too. Sometimes you and the other participants may discuss and/or
sign a contract before the first ADR session begins. This contract can
outline everyone’s roles. 


• For example: 


◦ I n processes like mediation, you usually have a very active role

—your role includes listening, talking, and deciding. 

◦ In processes like conciliation, the ADR practitioner may give

you advice—your role includes listening, talking ,and
deciding. Your decisions include whether you will accept the
ADR practitioner’s advice. 

◦ In processes like arbitration, you can have a less active

role. You and the other participants present the information and
your points of view to the ADR practitioner, who makes the
decision based on the information provided.

• Suggestions for Getting the Most Out of Your ADR

session

• If you are participating in ADR, you and the other participants are
generally expected to make a genuine effort to reach an agreement.
This means that during the ADR process you and the other
participants:

◦ approach the ADR process with an open-mind 

◦ listen to the other participants’ points of view and suggestions

and tell them your own 

◦ talk to the other participants openly about the issues in

dispute 

◦ provide information to the other participants— when deciding

what information to provide, think about what approach you
would like the other participants to take in giving you
information 

◦ are available to meet for the ADR sessions

• Suggestions for Getting the Most Out of Your ADR

session

 • You may find participating in an ADR process difficult. Making
decisions needs all your attention. It is important that you let the ADR
practitioner know if you cannot participate in a way that helps you get
the most out of the ADR process. Sometimes your ADR practitioner
may tell you and the other participants that they can no longer assist
you to resolve your dispute.

• There are many reasons why an ADR practitioner may decide to do

this. One reason could be that a participant in the ADR session is not
participating in a way that means they and others get the most out of
the ADR process.

• 

If your dispute is not resolved by ADR it may later go to court. If
the court thinks that a participant did not manage their behavior well
during the ADR process, the court could send you and the other
participants back to ADR or require the participant to pay money to
the other participants involved (by making a costs order or damages
award). 

• 

What is important is that you work with the ADR practitioner and the
other participants to try your best to reach an agreement that you and
the other participants can live with.

Preparing for ADR - Confidentiality, Standards,

and Feedback

Confidentiality in ADR

• What information is confidential?


• Information that must be kept confidential can include: 

◦ what you and other participants say during ADR discussions,

including ideas about possible solutions 

◦ information created and shared during the ADR sessions 

◦ the discussions between you and the ADR practitioner if you

have a private session

◦ phone calls and emails between you and the other participants

 ◦ y our thoughts and opinions about how the other participants

behaved during the ADR sessions 

◦ reasons why you and the other participants did not reach an
agreement. 

• Confidentiality in ADR

• How can you make sure your information is kept confidential?

• You and the other participants can make sure your information is
kept confidential by making a confidentiality agreement before your
first ADR session. You can have a written or spoken agreement to
keep the information private. The people who make and agree to a
confidentiality agreement could include: you, the other
participants, the ADR practitioner, people who aren’t directly involved
in the ADR sessions, such as your lawyer or support person. 


• If you have a written agreement, read through it and think about any
communications that might not be covered before you sign it. Think
about whether you need a detailed agreement on
confidentiality. Make your agreement as detailed as it needs to be and
ensure to:

◦ include all kinds of communication 

◦ outline any exceptions, where the communications can be

discussed publicly 

◦ revisit it if necessary

• There are some situations where information may not have to be

kept confidential. Exceptions of confidentiality include:

◦ You and the other participants all agree to make some

information public.

◦ You or the other participants discuss the ADR session with

people who are directly affected by the outcome, for example
children in a family dispute or your company manager in a
commercial dispute.

◦ You are seeking professional advice from a lawyer or financial

advisor, so long as they keep the information you give them to
themselves.

◦ The ADR practitioner discloses information in the ADR session

in a way that does not identify you (such as for research or
educational purposes).   

 ◦ ou give permission to the ADR practitioner to discuss the

Y
ADR process with your and the other participants’ lawyers and
expert advisors, if they were not present during the ADR
session.   

◦ The ADR practitioner is required by law to disclose information,

for example to report child abuse and actual or possible threat
to human life or safety.

• Confidentiality in ADR


• Can you use ADR discussions in court?


• If you do not reach an agreement using an ADR process, you may

then want to use information or discussions from the ADR process in
court. 


• 



Generally your ADR discussions or information cannot be used in this
way. Sometimes you may be able to talk about your ADR discussions
in court. The judge will decide when this can occur. 


• Some situations where you may be able to bring your ADR

discussions to the attention of the court include where:

◦ You or the other participants did not act in good faith.

◦ There is fraud involved. 

◦ There is criminal behavior involved.

◦ There are breaches of the law.

◦ The information is from ADR discussions and it is information

that is available separately from and independently of the ADR
process (that is, the information would be available even if
there had not been an ADR process).

• ADR Standards

• The behavior of some ADR practitioners is regulated by standards
and guidelines set by ADR professional organizations.

• Accreditation of Mediators


• Some areas of ADR, like mediation, have introduced national

standards. Mediators can be approved to practice under the
Australian National Mediator Standards. You can find a copy of the
National Standards at www.msb.org.au. Not all mediators are
approved under these National Standards. You will need to check if
your mediator is approved by contacting the organization that the
mediator works for or has been approved by. Using a mediator who
meets the National Standards, or has qualifications in the area of
your dispute, means it is more likely that: 

• 


1. you will receive a high-quality ADR service 

2. your dispute will be handled properly 

3. you will achieve an appropriate outcome for all participants. 

4.
• The National Standards are designed to ensure that, as far as
possible, an approved mediator will:

1. be of ‘good character’ (they are honest and fair) 

2. hold proper insurance 

3. have at least basic training

4.
• Although these standards are voluntary, NADRAC strongly
recommends that you or your lawyer find a mediator that meets the
standards.

• How to Give Feedback About Your ADR

Practitioner

• Feedback can include compliments and complaints about the
behavior of ADR practitioners.Complaining is okay. Complaints often
provide the ADR industry with helpful information about how to
improve ADR processes. 


• 

If you are still involved in ADR sessions with the ADR practitioner,
resolving your complaint may help to restore trust in your relationship
with your practitioner, so that you are comfortable that they will be
 able to help you resolve your dispute. 


• What you might compliment or complain about


• Your compliment or complaint could be about whether your ADR

practitioner: 

• 


◦ anaged the relationship between you and the other

m
participants appropriately 

◦ behaved honestly, including in relation to the costs of their

services 

◦ behaved professionally 

◦ provided you with certificates and reports, especially when

these are required before you can take other steps to resolve
your dispute, including going to court

• Role of ADR Practitioner


• You can expect your ADR practitioner to be: 


◦ i mpartial

◦ independent 

◦ qualified

◦ professional at all stages of your ADR process 

◦ clear about the process they are using

• How to Give Feedback About your ADR

Practitioner


• How to Give Feedback About your ADR Practitioner


• A mediator accredited under the National Mediation Accreditation

System will work for, or be a member of, a Recognized Mediator
Accreditation Body (RMAB). You can ask your mediator if they work
for an RMAB, and contact that body directly. Your mediator should
provide you with the name of their RMAB. Some RMABs may have
time limits that require you to make a complaint soon after your
 mediation. You can find the contact details of RMABs on the Mediator
Standards Board website at www.msb.org.au. Depending on the
RMAB, you may be able to make a complaint: 


◦ in writing 

◦ over the phone

◦ in person 

◦ in a feedback survey

◦
• If your ADR practitioner is not accredited under the National
Mediator Accreditation System, you might be able to make a
complaint to:

◦ the organization employing the ADR practitioner (if any)

◦ any professional body or association the ADR practitioner

belongs to

◦
• Your ADR practitioner should provide you with the name of their
professional organization before the ADR process starts.

• What Happens After You Make a Complaint?


• It may be possible to solve your complaint immediately, if you are
satisfied with: 

◦ knowing that your ADR practitioner will be aware of your

complaint

◦ you and the ADR practitioner hearing each other’s point of

view 

◦ receiving an apology 

◦ having an error corrected 

◦ being reassured that your ADR practitioner was acting

correctly 

◦ a review being undertaken to ensure that an issue was dealt

with appropriately

◦
• In other situations, your complaint might take a while to solve. It
might help you solve your complaint if you raise it with the ADR
practitioner yourself, put your complaint in writing or give the
organization working on your complaint more information about your
complaint. 

 • What to Expect From Making a Complaint


• When you make a complaint, you can expect to:

◦ be provided with the opportunity to express your opinion in

ways that are reasonable, lawful, and appropriate 

◦ have a fair and impartial assessment and, where appropriate,

an investigation of your complaint based on the merits of the
case 

◦ have a fair hearing 

◦ be informed, at least in general terms, about the actions taken

and the outcome of your complaint 

◦ be provided with reasons that explain decisions affecting you 

◦ be treated with courtesy and respect 

◦ communicate your concerns and views without fear of reprisal

or other unreasonable response

• What You are Expected to Do When Making a

Complaint

• When making a complaint, you are expected to:

◦ clearly identify, to the best of your ability, the issues of your

complaint

◦ provide, to the best of your ability, all the relevant information

available to you at the time you make the complaint 

◦ be honest in your communications 

◦ disclose any other action you have taken in relation to your

complaint

◦ cooperate with staff who deal with your complaint 

◦ treat staff who deal with your complaint with courtesy and
respect

Alternative Dispute Resolution - Lesson Summary

• The key points from this module are the following:

• Alternative dispute resolution (ADR) is a body of dispute-resolution

methods outside of the litigation process. ADR is often faster, less
 faster, less expensive, and more private than litigation. ADR can be
the preferred dispute resolution method, particularly when an
ongoing relationship between disputants is desired. 


• 

However, some types of disputes might be best resolved through
litigation, such as in cases where parties have unequal power or
resources or in civil rights violations. 


• 

ADR sessions are usually confidential, the level of confidentiality can
be decided among you and the other participants. You can ask your
lawyer for advice on what to do in an ADR process, a court or
tribunal. You can prepare for you ADR session by asking your ADR
practitioner questions about what to expect.


• 

There are a number of ways you can complain about an ADR
practitioner; complaints about ADR practitioners often provide the
ADR industry with helpful information about how to improve ADR
processes. If you want to have a support person with you during
your ADR process you will need to talk to your ADR practitioner to
make sure this is okay. A support person can add value for all the
people involved in resolving the dispute. If you ask someone to be
your support person, it is best if they are not directly involved in the
dispute.

• 

It is important that you work with the ADR practitioner and the other
participants to try your best to reach an agreement that you and the
other participants can live with. 

Module 4 - Methods of Alternate Dispute Resolution

Methods of Alternate Dispute Resolution -

Learning Outcomes
 • On successful completion of this module, you will be able to: 

◦ Define the role of negotiation in avoiding and settling disputes.

◦ Explain negotiation and how it is commonly employed in

business.

◦ Describe the implications of bargaining power during

negotiation.

◦ Identify the benefits and drawbacks of negotiation as a form of

alternative dispute resolution (ADR).

◦ Define the process of mediation as an alternative dispute

resolution (ADR) strategy.

◦ Identify disputes suitable to mediation as a form of ADR.

◦ Describe the benefits and drawbacks of mediation as a form of

ADR.

◦ Define the option of arbitration as an alternative dispute

resolution (ADR) strategy.

◦ Explain contemporary issues of fairness in arbitration.

◦ Define when arbitration is a viable option for dispute resolution.

◦ Identify the benefits and drawbacks of arbitration as a form of

ADR.

◦ Explain in-house dispute-resolution methods, med-arb, private

judging, mini-trials, and summary jury trials.

Negotiation

Scenario
Imagine that you are a tent manufacturer. Your supplier of tent fabric
routinely supplies you with appropriate water-resistant fabric to construct
your tents, so that you can produce your products and bring them to
market. After many years of a good working relationship, your fabric
supplier delivered nonconforming goods. Specifically, the fabric delivered
was not water-resistant, despite your need for water-resistant fabric to
produce your tents.

However, on your notifying the supplier of the problem, the supplier denied
that the fabric was nonconforming to your order. You refused to pay for the
goods. The fabric supplier insisted on payment before future delivery of
any additional fabric. Without water-resistant fabric, you cannot continue
to produce your tents.

This is an example of a business to business (B2B) dispute. 

Despite the problem, you will likely wish to continue working with this
supplier, since you have a good, long-standing relationship with them. This
problem seems to be a “hiccup” in your regular business relationship. 

Accordingly, you will probably want to resolve this dispute quickly and
without hard feelings. It is very unlikely that you will immediately hire an
attorney to file a formal complaint against your supplier. However, that
does not change the fact that there is a dispute that needs to be resolved.

• About Negotiation


• Negotiation is a method of alternative dispute resolution

(ADR) that retains power to resolve the dispute to the parties
involved.


• One of the first strategies that you and your supplier are likely to
employ is negotiation. No outside party is vested with authoritative
decision-making power concerning the resolution of the
dispute. Negotiation requires the parties to define the conflicts and
agree to an outcome to resolve those conflicts. Often, this can take
the form of a compromise. Note that a compromise does not mean
that anyone “loses.” 


• 

If both parties are satisfied with the result of the negotiation and the
business relationship can continue moving forward, then both parties
will be very likely to consider this as a “winning” situation. 

 Benefits of Negotiation

Benefits to negotiation as a method of ADR include its potential for a

speedy resolution, the inexpensive nature of participation, and the fact that
parties participate voluntarily.

Drawbacks of Negotiation:

Drawbacks include the fact that there are no set rules, and either party
may bargain badly or even unethically, if they choose to do so. In a
negotiation, there is no neutral party charged with ensuring that rules are
followed, that the negotiation strategy is fair, or that the overall outcome is
sound. Moreover, any party can walk away whenever it wishes. There is no
guarantee of resolution through this method. The result may not be “win-
win” or “win-lose,” but no resolution at all.

Additional Considerations:

Generally speaking, attorneys are not involved in many negotiations. This

last point may be seen as a drawback or a benefit, depending on the
circumstances of the negotiation.

• About Negotiation

• Though our example involves B2B, the parties may or may not have
equal bargaining power. If your business and your supplier are both
dependent on each other for roughly equal portions of the respective
businesses, then they are most likely relatively equal with respect to
bargaining power. 


• 

However, in our example, if your business is a very small business but
your supplier is a very large business—perhaps with a patent
protecting the rights to the specialty fabric that you need—then we
might say that the B2B negotiation is potentially unbalanced, since
one party has a much more powerful bargaining position than the
other.

 • 

Specifically, your business needs that particular type of fabric, which
is only available from one supplier. But your supplier does not need
your business because it has a legal monopoly in the form of a patent
for its product, and it probably sells to many manufacturers. This
would be an example of unequal bargaining power. When the
negotiation occurs as a result of a dispute, but not a legal dispute per
se, then the party with the weakest bargaining position may be in a
very vulnerable spot.

Example

When Rubbermaid’s raw materials price for resin increased, it needed to

raise its prices. However, Wal-Mart refused to accept the necessary price
increase for Rubbermaid products. This refusal had a substantial negative
impact on Rubbermaid’s business, since Wal-Mart was its main customer.
In short, Rubbermaid needed Wal-Mart, but Wal-Mart did not need
Rubbermaid.

• About Negotiation

• Negotiation is a skill often developed by people who are charged
with settling existing disputes or with creating new agreements. Let’s
go back to our example. Imagine that after negotiating with your
fabric supplier, the following facts emerged: The fabric supplier
believed that it sent the correct fabric to you, because one of your
new employees inadvertently ordered the wrong fabric. 

• 

You reviewed your business records and determined that this
allegation was true. This sounds like a misunderstanding that would
be easy to clear up in negotiation, doesn’t it? Imagine the
embarrassment and hard feelings that would have been caused by
immediately filing a formal complaint in court, not to mention the
great expense that both parties would have incurred.

• Through negotiation, chances are very good that this

misunderstanding will be resolved in a win-win outcome and that you
will be able to continue your working relationship with your supplier.

How can you be a good negotiator?

Before the Negotiation

You can:

• Talk to the other people before making decisions (talk first, decide last)

• Think about what is behind the disputed issues for you and each of the
other people involved—what each person’s     needs or desires are

• Try to think of options for outcomes that address what everyone wants

• Think about what you will do if you do not reach an agreement at the
negotiation

• Commit to finding an outcome that benefits everyone

• Choose a time and place for the negotiation (if you are meeting face to
face) that suits you and the other people involved.

During the Negotiation

You can:

• Be hard on the problem—talk about all the issues completely

• Be soft on the person—avoid blaming the other people involved

• Focus on the issues in dispute, not the personalities of the other people
involved

• Emphasize any common ground you and the other people involved share
—common ground makes it easier to            understand each other

• Think creatively about options that could resolve the dispute

• Avoid unfair tactics and manage your emotions

• Make sure that you and the other people involved understand what each
other is saying by communicating well

• Look for an outcome that will work for everybody

• Be clear that you have reached an agreement with the other people
involved—write the agreement down at the end     of the negotiation.

• Types of Negotiation

• There are different types of negotiation. The most common type is
where you and the other people involved in the dispute talk about the
 dispute and try to come to an agreement that works for
everyone. This type of negotiation (sometimes called direct
negotiation) is suitable as long as you feel comfortable having a
conversation with the other people involved in the dispute. Direct
negotiation is particularly suitable if you and the other people
involved:


◦ an have a discussion and make decisions without the

c
assistance of another person

◦ want to make the decision yourselves


◦ ant to maintain the best possible ongoing relationship

w
◦

◦ want to control the outcome, rather than ask someone else to

decide


◦ ant to keep discussions confidential

w
◦

◦ want to find innovative ways to resolve the dispute, such as an

outcome where everybody benefits (sometimes called a win/
win outcome).


◦
• You can also choose to have another person involved in the
negotiation who helps run the negotiation and does not take sides.
This type of negotiation is more structured, and the way the
negotiation process works can be very different. The type of
negotiation you and the other people involved choose depends on
how much control you each want to maintain over how the
negotiation works and the type of negotiation you feel comfortable
using. Sometimes direct negotiation will not be a suitable process for
you to resolve your dispute—for example, if you have a difficult or
bad relationship with the other people involved.

Mediation

About Mediation
•

• Mediation is a method of ADR in which parties work to form a

mutually acceptable agreement.

• Like negotiation, parties in mediation do not vest authority to decide

the dispute in a neutral third party. Instead, this authority remains
with the parties themselves, who are free to terminate mediation if
they believe it is not working. 


• 

Often, when parties terminate mediation, they pursue another form
of ADR, such as arbitration, or they choose to litigate their claims in
court. 

• Who Should Use Mediation?


• Mediation is appropriate only for parties who are willing to participate
in the process. Like negotiation, mediation seeks a “win-win”
outcome for the parties involved. 


• 

Additionally, mediation is confidential, which can be an attractive
attribute for people who wish to avoid the public nature of litigation. 


• 

The mediation process is usually much faster than litigation, and the
associated costs can be substantially less expensive than litigation.

• Role of Mediator

• Unlike in many negotiations, a third party is involved in mediation.
Indeed, a neutral mediator is crucial to the mediation
process. Mediators act as a go between for the parties, seeking to
facilitate the agreement.Mediators do not provide advice on the
subject matter of the dispute. In fact, the mediators may not possess
 any subject-matter expertise concerning the nature of the dispute. 


• 

However, many mediators are trained in conflict resolution, and this
allows them to employ methods to discover common goals or
objectives, set aside issues that are not relevant, and facilitate an
agreement into which the parties will voluntarily enter. 

Requirements

Requirements to be a mediator vary by state. There are no uniform

licensing requirements, but some states require specific training or
qualifications for a person to be certified as a mediator.

Mediators try to find common ground by identifying common goals or

objectives and by asking parties to set aside the sometimes emotionally
laden obstacles that are not relevant to the sought-after agreement itself. 

Disputants choose their mediator. This choice is often made based on the

mediator’s reputation as a skilled conflict resolution expert, professional
background, training, experience, cost, and availability. 

• Role of Mediator

• After a mediator is chosen, the parties prepare for mediation. 


• 

For instance, prior to the mediation process, the mediator typically
asks the parties to sign a mediation agreement. This agreement may
embody the parties’ commitments to proceed in good faith,
understanding of the voluntary nature of the process, commitments to
confidentiality, and recognition of the mediator’s role of neutrality
rather than one of legal counsel. 


• 

At the outset, the mediator typically explains the process that the
mediation will observe. The parties then proceed according to that
plan, which may include opening statements, face-to-face
 communication, or indirect communication through the mediator. 


• 

The mediator may suggest options for resolution and, depending on
his or her skill, may be able to suggest alternatives not previously
considered by the disputants.

• Who Should use Mediation?


• Mediation is often an option for parties who cannot negotiate with
each other but who could reach a mutually beneficial or mutually
acceptable resolution with the assistance of a neutral party. The
neutral party will help sort out the issues to find a resolution that
achieves the parties’ objectives. 



Sometimes parties in mediation retain attorneys, but this is not
required. If parties do retain counsel, their costs for participating in
the mediation will obviously increase.



In business, mediation is often the method of ADR used in disputes
between employers and employees about topics such as workplace
conditions, wrongful discharge, or advancement grievances.
Mediation is used in disputes between businesses, such as in
contract disputes. Mediation is also used for disputes arising
between businesses and consumers, such as in medical malpractice
cases or health care disputes.

• Who Should use Mediation?


• Like other forms of dispute resolution, mediation has benefits and
drawbacks.

Benefits

The relative expediency of reaching a resolution

-The reduced costs as compared to litigation

-The ability for parties that are unable to communicate with each other to
resolve their dispute using a non-            adversarial process

-The imposition of rules on the process by the mediator to keep parties

“within bounds” of the process

  confidentiality

-The voluntary nature of participation

-The potential for a “win-win” outcome.

Attorneys may or may not be involved, and this can be viewed as either a
benefit or a drawback, depending on the circumstances.

Drawbacks

If disputants are not willing to participate in the mediation process, the

mediation will not work. This is because mediation requires voluntary
participation between willing parties to reach a mutually agreeable
resolution. 

Additionally, even after considerable effort by the parties in dispute, the

mediation may fail. This means that the resolution of the problem may
have to be postponed until another form of ADR is used, or until the
parties litigate their case in court. Since mediators are individuals, they
have different levels of expertise in conflict resolution, and they possess
different backgrounds and world views that might influence the manner in
which they conduct mediation.

• Who Should use mediation?


• Parties may be satisfied with one mediator but not satisfied in
subsequent mediations with a different mediator. Even if an
agreement is reached, the mediation itself is usually not
binding. Parties can later become dissatisfied with the agreement
reached during mediation and choose to pursue the dispute through
other ADR methods or through litigation. 


• 

For this reason, parties often enter into a legally binding contract that
embodies the terms of the resolution of the mediation immediately on
conclusion of the successful mediation. 

 • 

Therefore, the terms of the mediation can become binding if they are
reduced to such a contract, and some parties may find this to be
disadvantageous to their interests. Of course, any party that signs
such an agreement would do so voluntarily. 


• 

However, in some cases, if legal counsel is not involved, parties may
not fully understand the implications of the agreement that they are
signing.

Arbitration

Arbitrator

• Arbitration is a method of ADR in which parties vest authority in

a third-party neutral decision maker who will hear their case and
issue a decision, which is called an arbitration award.

• An arbitrator presides over arbitration proceedings. Arbitrators are

neutral decision makers who are often experts in the law and subject
matter at issue in the dispute. Their decisions do not form binding
precedent.


• 

Arbitrators may be members of the judiciary, but in arbitrations they
are not judges. Arbitrators act in an analogous capacity to judges in
trials. For instance, they determine which evidence can be
introduced, hear the parties’ cases, and issue decisions. 


• 

They may be certified by the state in which they arbitrate, and they
may arbitrate only certain types of claims. For instance, the Better
 Business Bureau trains its own arbitrators to hear common
complaints between businesses and consumers (B2C).

• Mandatory Arbitration

• Participation in the arbitration proceeding is sometimes
mandatory. Mandatory arbitration results when disputes arise out of a
legally binding contract involving commerce in which the parties
agreed to submit to mandatory arbitration. Arbitration is also
mandatory when state law requires parties to enter into mandatory
arbitration.


• 

Although perhaps not obvious, federal law lies at the heart of
mandatory arbitration clauses in contracts. Specifically, Congress
enacted the Federal Arbitration Act (FAA) 9 U.S.C. §1 et seq. through
its Commerce Clause powers. 


• 

This act requires parties to engage in arbitration when those parties
have entered into legally binding contracts with a mandatory
arbitration clause, providing the subject of those contracts involves
commerce.

• Mandatory Arbitration

• The U.S. Supreme Court interpreted this federal statute to apply to
matters of both federal and state court jurisdiction. Indeed, the Court
held that the FAA created a national policy in favor of arbitration. It
also held that the FAA preempts state power to create a judicial forum
for disputes arising under contracts with mandatory arbitration
clauses. In a later decision, the Court held that the FAA encompasses
transactions within the broadest permissible exercise of
congressional power under the Commerce Clause. This means that
the FAA requires mandatory arbitration clauses to be enforceable for
virtually any transaction involving interstate commerce, very broadly
construed.



Some states require mandatory arbitration for certain types of
disputes. Many parties accept the arbitration award without appeal.
 However, when state law requires mandatory arbitration of certain
types of disputes, parties are permitted to appeal because the
arbitration is non-binding. 



In non-binding arbitration, the parties may choose to resolve their
dispute through litigation if the arbitration award is rejected by a party.
For instance, in Oregon, the state courts require mandatory arbitration
for civil suits where the prayer for damages is less than $50,000,
excluding attorney fees and costs.

• Appealing an Arbitration Award


• Some states have statutory requirements that, in practice, create a
chilling effect on appealing an arbitration award. 


• 

For example, in the state of Washington, if the appealing party from a
non-binding mandatory arbitration does not do better at trial than the
original award issued by the arbitrator, then that party will incur
liability not only for its own expenses but also for those of the
opposing side. 


• 

In non-binding arbitration, this is a powerful incentive for parties to
accept the arbitration award without appealing to the judicial system.

• Voluntary Arbitration

• Voluntary arbitration also exists, and it is frequently used in business
disputes.


• 

Sometimes parties simply agree that they do not want to litigate a
dispute because they believe that the benefits of arbitration outweigh
the costs of litigation, so they

choose voluntary arbitration in hopes of a speedy and relatively
inexpensive outcome. 

• 

Other times, parties are not certain how strong their case is. In such
cases, arbitration can seem much more attractive than litigation.

• Binding and Non-Binding Awards


• Arbitration awards can be binding or non-binding. Some states, like
Washington State, have codified the rule that arbitration decisions are
binding when parties voluntary submit to the arbitration procedure. 


• 

In binding arbitration, the arbitration award is final; therefore,
appealing an arbitration award to the judicial system is not available.


• 

In many states, an arbitration award is converted to a judgment by
the court, thereby creating the legal mechanism through which the
judgment holder can pursue collection activities. This process, called
confirmation, is contemplated by the FAA and often included in
arbitration agreements. 


• 

But even if the FAA does not apply, most states have enacted
versions of either the Uniform Arbitration Act or the Revised Uniform
Arbitration Act. These state laws allow confirmation of arbitration
awards into judgments as well.

• Arbitration Benefits and Drawbacks


• Like any other form of dispute resolution, arbitration has certain
benefits and drawbacks.


• 

Arbitration is an adversarial process like a trial, and it will produce a
“winner” and a “loser.” 


• 

Arbitration is more formal than negotiation and mediation and, in
 many ways, it resembles a trial.


• 

Parties present their cases to the arbitrator by introducing evidence.
After both sides have presented their cases, the arbitrator issues an
arbitration award.

• Arbitration Rules

• Rules related to arbitration differ by state. The rules of procedure that
apply to litigation in a trial do not typically apply to arbitration. 


• 

Specifically, the rules are often less formal or less restrictive on the
presentation of evidence and the arbitration procedure.


• 

Arbitrators decide which evidence to allow, and they are not required
to follow precedents or to provide their reasoning in the final award. 


• 

In short, arbitrations adhere to rules, but those rules are not the same
as rules of procedure for litigation. 


• 

Regardless of which rules are followed, arbitrations proceed under a
set of external rules known to all parties involved in any given
arbitration.

• Arbitration Cost

• Arbitration can be more expensive than negotiation or mediation, but
it is often less expensive than litigation. 


• 

In Circuit City Stores Inc. v. Adams, the U.S. Supreme Court noted
that avoiding the cost of litigation was a real benefit of arbitration. The
costly discovery phase of a trial is nonexistent or sharply reduced in
 arbitration. 


• 

However, arbitration is not necessarily inexpensive. Parties must bear
the costs of the arbitrator, and they typically retain counsel to
represent them. 

Example

Additionally, in mandatory arbitration clause cases, the arbitration may be

required to take place in a distant city from one of the disputants. This
means that the party will have to pay travel costs and associated
expenses during the arbitration proceeding. The Circuit City Court also
noted that mandatory arbitration clauses avoid difficult choice-of-law
problems that litigants often face, particularly in employment law cases.

• Arbitration Privacy


• Arbitration is faster than litigation, but it is not as private as

negotiation or mediation. Unlike mediators, arbitrators are often
subject-matter experts in the legal area of dispute. 

• 


• 

However, as is true for mediators, much depends on the arbitrator’s
skill and judgment.

• Arbitration Equality

• A common issue that arises is whether mandatory arbitration is fair in
certain circumstances. It’s easy to imagine that arbitration is fair when
both parties are equally situated. 


• 

For example, business to business (B2B) arbitrations are often
perceived as fair, especially if businesses are roughly the same size or
have roughly equal bargaining power. This is because they will be
able to devote approximately the same amount of resources to a
dispute resolution, and they both understand the subject under
 dispute, whatever the commercial issue may be. Moreover, in B2B
disputes, the subjects of disputes are commercial issues, which may
not implicate deeper social and ethical questions.

Example

Contract disputes between businesses might involve whether goods are

conforming goods or nonconforming goods under the Uniform
Commercial Code (UCC). No powerful social or ethical questions arise in
such disputes. Indeed, resolving such disputes might be seen as
“business as usual” to many commercial enterprises.

However, issues of fairness often arise in business to employee (B2E) and

business to consumer (B2C) situations, particularly where parties with
unequal bargaining power have entered into a contract that contains a
mandatory arbitration clause. In such cases, the weaker party has no real
negotiating power to modify or to delete the mandatory arbitration clause,
so that party is required to agree to such a clause if it wants to engage in
certain types of transactions. 

However, the U.S. Supreme Court has held that in B2E contexts, unequal
bargaining power alone is not a sufficient reason to hold that arbitration
agreements are unenforceable, and it is not sufficient to preclude
arbitration.

Example

Almost all credit card contracts contain mandatory arbitration clauses.

This means that if a consumer wishes to have a credit card account, he
will agree to waive his constitutional rights to a trial by signing the credit
card contract. As we know, the FAA will require parties to adhere to the
mandatory arbitration agreed to in such a contract, in the event that a
dispute arises under that contract. In such cases, questions regarding
whether consent was actually given may legitimately be raised.

• Arbitration Equality

• Concerns about fairness do not end at contract formation. If a
dispute arises and mandatory arbitration is commenced, the unequal
power between parties will continue to be an important issue. 

• 


• 

In the case between a credit card company and an average consumer
debtor, the credit card company would clearly be in a more powerful
position vis-à-vis the debtor by virtue of the company’s financial
strength and all that comes with it, such as experienced attorneys on
staff, dispute-resolution experience, and contractual terms that favor
it, rather than the consumer debtor. In such cases, if the consumer
debtor is the aggrieved party, he may very well decide to drop the
matter, especially if the arbitration clause requires arbitration
proceedings to occur in a distant city. 


• 

The credit card company will have vast financial resources as
compared to the consumer debtor. Moreover, in this example the
credit card company’s legal counsel will know how to navigate the
arbitration process and will have experience in dispute resolution,
processes that often confound people who are not trained in
law. Additionally, the list of arbitrators may include people who are
dependent on repeat business from the credit card company for their
own livelihoods, thereby creating—or at least suggesting—an inherent
conflict of interest.


• 

Many mandatory arbitration clauses create binding awards on one
party while reserving the right to bring a claim in court to the other
party. That is, a mandatory arbitration clause may allow the credit
card company to appeal an arbitrator’s award but to render an award
binding on the consumer debtor. Obviously, this would allow the
credit card company to appeal an unfavorable ruling, while requiring
the consumer debtor to abide by an arbitrator’s unfavorable ruling. To
a consumer debtor, the arbitration experience can seem like a game
played on the credit card company’s home court—daunting, feckless,
and intimidating.

 • Arbitration Equality

• Additionally, some types of disputes that have been subjected to
mandatory arbitration raise serious questions about the
appropriateness of ADR, due to the nature of the underlying
dispute. For example, in some recent B2E disputes, claims relating to
sexual assault have been subjected to mandatory arbitration when
the employee signed an employment contract with a mandatory
arbitration clause.

Example 1

Tracy Barker was reportedly sexually assaulted by a State Department

employee in Iraq while she was employed as a civilian contractor by KBR
Inc., a former Halliburton subsidiary. When she tried to bring her claim in
court, the judge dismissed the claim, citing the mandatory arbitration
clause in her employment contract. After arbitration, she won a three-
million-dollar arbitration award. As KBR Inc. noted, this “decision validates
what KBR has maintained all along; that the arbitration process is truly
neutral and works in the best interest of the parties involved.” Despite this
statement, KBR Inc. has filed a motion to modify the award.

Example 2

In a similar case, employee Jamie Leigh Jones worked for KBR Inc. in Iraq
when she was drugged and gang raped. She was initially prohibited from
suing KBR Inc. in court because her employment contract contained a
mandatory arbitration clause. However, when considering this case, the
Fifth Circuit Court of Appeals ruled that sexual assault cases may, in fact,
be brought in court rather than being subjected to mandatory arbitration,
despite the contract language requiring mandatory arbitration. Jones’s
claims were beyond the scope of the arbitration clause, because sexual
assault is not within the scope of employment. Moreover, under Senator Al
Franken’s lead, the Senate took action to prohibit the Department of
Defense from contracting with defense contractors that require mandatory
arbitration for sexual assault claims.

If such action is passed, it would essentially allow the Fifth Circuit’s

holding to apply in all federal jurisdictions rather than just in the Fifth
Circuit. One might think that passing such a law would be a “no brainer” to
lawmakers. However, some Senators voted against the measure, arguing
that the federal government should not insert itself into rewriting contracts.
Instead, some argued that the use of arbitration and mediation should be
expanded for such cases. In B2C cases, different issues of fairness exist.
As noted previously, when the disputants possess unequal power, these
issues can be magnified. 

Public Citizen, a nonprofit organization that represents consumer interests

in Congress, released a report concerning arbitration in B2C
disputes. Specifically, the report argued that arbitration is unfair to
consumers in B2C disputes and that consumers fare better in litigation
than in arbitration. 

• Arbitration Equality

• According to the report, incentives exist to favor businesses over
consumers in the arbitration process. It pointed to the lack of appeal
rights, lack of requirement to follow precedents or established law,
limits on consumers’ remedies, prohibitions against class-action
suits, limitations on access to jury trials, limitations on abilities to
collect evidence, and greater expense as additional factors speaking
to the unfairness of arbitration over litigation in B2C disputes.


• 

Importantly, and despite the FAA’s broad interpretation, not all binding
arbitration clauses have been upheld by courts in B2C cases. In 2007,
the Ninth Circuit Court of Appeals ruled that AT&T’s binding
arbitration clause for wireless customers is unenforceable under
California state law. The court further noted that the relevant state law
is not preempted by the FAA, because the FAA does not prevent the
courts from applying state law. In this case, that law involved
unconscionability of contract terms. As noted previously, the FAA
requires parties to submit to mandatory arbitration when they agree to
do so in a legally binding contract, and it preempts state powers to
provide a judicial forum in those matters.

 • 

However, the Ninth Circuit’s holding in this case underscores the fact
that state contract law is not circumvented by the federal
statute. Arbitration is a widely used form of ADR, but important
questions have been raised about its appropriateness in certain types
of disputes. Before signing a mandatory arbitration agreement, it’s
important to realize that under current law, your opportunity to bring
your claim in court will be severely restricted or entirely precluded. 


• 

Moreover, if you sign such an agreement with a party who holds
inherently greater power than you, such as your employer, then you
may find yourself at an extreme disadvantage in an arbitration
proceeding.

Uncommon Methods of ADR

Introduction

Remember that ADR is a broad term used to denote methods to resolve

disputes outside of litigation. This can really be any method, whether or
not it bears a specific label or adheres to a particular procedure. 

For instance, negotiation might be a quick meeting in the hallway between

disputants, or it might involve a formal round of negotiations where all
parties are represented by legal counsel. 

However, when parties are attempting to resolve a dispute, it makes sense

for them to agree to a specific procedure for doing so beforehand, so that
each party understands how to proceed.

Negotiation, mediation, and arbitration are the most common forms of

ADR. However, these methods might not be appropriate for every
dispute. Other forms of ADR exist, ranging from in-house programs to very
formal external processes. 

• Uncommon Methods of ADR


• Ethics Hotline


• Some ADR processes or programs are available only to certain

groups of people, such as members of a particular organization. One
major benefit is that reporting parties generally (but not always)
remain anonymous. Another benefit is that the company has time to
redress problems that could give rise to disputes of much greater
magnitude if left unaddressed.

• 


• 

For instance, some organizations, like Boeing, have an internal ethics
hotline. This hotline is available for employees to report perceived
ethics violation that they have observed. Ethics advisors answer
employees’ questions and follow up on reports that need further
investigation. 


• Open-Door Policy


• An open-door policy is an in-house program that allows company

employees to go directly to any level of management to file a
complaint or grievance, without threat of retaliation for their
reporting. In theory, this policy creates an open atmosphere of trust,
and it breaks down class barriers between groups of
employees. However, many employees may not feel comfortable in
making a complaint about a manager’s decision. Moreover,
supervisors may not be comfortable with their employees bypassing
them to file complaints. Open-door policies sound very good in
theory, but they may not work as well in practice.

• Uncommon Methods of ADR


• Ombudsman


• Another type of in-house program is an ombudsman’s office. These

stations generally hear complaints from stakeholders, such as
employees or customers.

• 

• 

Ombudsmen try to troubleshoot these complaints by investigating
and attempting to resolve the issues before they escalate into more
formal complaints.


• Mediation-Arbitration


• More formal methods of ADR include mediation-arbitration (med-

arb), which is essentially a mediation followed by an arbitration. If the
mediation does not produce a satisfactory outcome, then the parties
submit to arbitration. The neutral party mediating the dispute also
serves as the arbitrator if the dispute-resolution process goes that
far.  


• 

Med-arb has the same benefits and drawbacks as mediation and
arbitration alone, with some important differences. For instance,
parties in a med-arb know that their dispute will be resolved. This is
unlike mediation alone, where parties may walk away if they do not
think that the mediation is serving their interests. 


• 

Moreover, the parties in med-arb have an opportunity to reach a win-
win outcome as in mediation. However, if they do not reach a
satisfactory outcome, then one party will “win” and one party will
“lose” during the arbitration phase. The knowledge that an arbitration
will definitely follow a failed mediation can be a strong incentive to
ensure that the mediation phase of a med-arb works.

• Uncommon Methods of ADR


• Private Judging


• 

The parties who can afford to pay for this service have a substantial
benefit in not having to wait to have their cases heard in the public
 court. 


• 

The private trial is also private rather than public, which may be
important to parties who require confidentiality. 


• 

In states where statutes permit hiring a judge for such matters, the
parties’ ability to appeal is often preserved. 

Benefits

This system may benefit those who can afford to pay for this service, while
others must wait for their case to appear on the docket in public court. 

This raises questions of fairness.

Drawbacks

Drawbacks include the sometimes questionable nature of enforceability of

judgments rendered, though some state statutes allow enforceability of
those judgments as if they were issued in public court.

• Uncommon Methods of ADR


• Mini-Trial


• A mini-trial is a procedure that allows the parties to present their

case to decision makers on both sides of the dispute, following
discovery. This is a private affair.

• 


• 

After the cases are presented, the parties enter into mediation or
negotiation to resolve their dispute.


• Summary Jury Trail


 • A summary jury trial is a mock trial presented to a jury whose verdict
is non-binding. The presentation is brief and succinct, and it follows a
discovery period. The jury does not know that its verdict will be
advisory only.

• 


• 

This process allows parties to measure the strengths and weaknesses
of their cases prior to engaging in litigation, which presumably saves
both time and money. After the mini-trial, parties are in a better
position to negotiate or mediate an outcome that fairly represents
their positions.

Public Policy, Legislation, and Alternative Dispute

Resolution

Alternative Dispute Resolution

• lternative dispute resolution can be a very useful alternative to

A
litigation. There are many advantages to disputants, such as:


◦ expediency

◦ cost savings

◦ greater privacy than litigation

◦
• In business to business (B2B) disputes, alternative dispute resolution
(ADR) often makes sense.

• Federal Arbitration Act


• The Federal Arbitration Act (FAA) is a federal statute that the U.S.
Supreme Court interpreted as a national policy favoring arbitration.


• 

According to the Southland Corp Court, state power to create judicial
forums to resolve claims when contracting parties enter into a
mandatory arbitration agreement has been preempted by the FAA. 

 • 

However, not all disputes are well suited for ADR. This is an area in
which Congress could make substantial changes in public policy
through the creation of new law, to ensure fairness between unequal
parties and to ensure the protection of civil rights. 


• 

Congress could do this by making ADR optional, rather than
mandatory, for some types of disputes. It could exclude certain types
of disputes from being bound to arbitration through mandatory
arbitration clauses.

Example

The proposed Arbitration Fairness Act of 2009 (AFA) would invalidate

mandatory arbitration clauses in employment and consumer disputes, as
well as in disputes arising from civil rights violations. The AFA is a
proposed bill to amend the FAA. Under the Commerce Clause, Congress
has the power to limit the use of mandatory arbitration, just as it has the
power to enforce mandatory arbitration clauses under the Commerce
Clause through the existing FAA. By passing a new law that excludes
certain types of disputes from being subjected to mandatory arbitration,
Congress could set new policy regarding fairness in dispute resolution.
Likewise, if it fails to act, Congress is also acceding to the U.S. Supreme
Court’s broad interpretation of the FAA as a national policy favoring
arbitration. Either way, policy regarding mandatory arbitration exists, and
Congress has a central role in defining that policy.

• Mandatory Arbitration

• In 1925, when the FAA was originally passed, records indicate that
Congress intended that mandatory arbitration clauses be enforced in
contracts between merchants, rather than between businesses and
consumers or between employers and employees. 


• 

In the latter relationships, the parties have vastly unequal power.

 • 

Moreover, despite the existence of mandatory arbitration clauses in
contracts, the FAA was not contemplated as a means to preempt
state power to provide judicial forums for certain types of disputes. 


• 

However, the U.S. Supreme Court has greatly expanded the FAA’s
applicability since then.

• Congress and the AFA


• If Congress passed the AFA, this would be an example of one
branch of government “checking” another branch’s power as
contemplated by the U.S. Constitution.


• 

Specifically, the legislative branch would be checking the judicial
branch’s power by passing a law to counteract the U.S. Supreme
Court’s broad interpretation of the FAA.


• 

This is how our government is supposed to work. 


• 

One branch checks another branch’s power. This “checking” of
power maintains relative balance among the branches. 


• 

Because people have different points of entry into the lawmaking
process, this system ultimately balances the many special interests of
the American people. 

Example

Some businesses and employers that do not wish the AFA to pass may
wonder what recourse they have. After all, the U.S. Supreme Court’s
interpretation of the FAA currently favors their interests. Since the AFA has
not yet passed, they could lobby lawmakers against its passage. Note too
that if the AFA becomes law, these interest groups are not simply shut out
of the government’s lawmaking process. They continue to have access to
lawmaking. One point of entry is through the legislative branch. For
instance, they could return to Congress and ask it to pass a new law to
counteract the AFA, or to repeal the AFA altogether. They also have a point
of entry to the lawmaking process through the judicial branch. Specifically,
once a case or controversy arose under the AFA in which they had
standing, they could ask the courts to interpret the statute narrowly, or
they could ask the courts to strike down the statute altogether.

• Repealing the FAA


• On the other side of the issue, consumers and employees who do
not like the FAA’s current broad interpretation can work within our
government system to change the law. 


• 

For instance, they can ask Congress to pass a new law, such as the
AFA. They could ask Congress to repeal the FAA. They could also
wait for another case to arise under the FAA to try to get the relevant
holding in the Southland Corp. case overturned. This is perhaps more
difficult than the first two options, because any U.S. Supreme Court
case produces many progeny at the circuit court level. 


• 

Each decision at the circuit court level also produces binding
precedent within that jurisdiction. It is very difficult to get a case
before the U.S. Supreme Court. Even if that happened, there would
be no guarantee that the Court would overturn a prior opinion. 


• 

In fact, the opposite is usually true. Precedent is most often followed
rather than overturned.

• Alternative Dispute Resolution


• In the United States, the policy process is open for participation,
though changes often take much work and time. People with special
interests tend to coalesce and press for changes in the law to reflect
 those positions. 


• 

This appears to be what is happening in the world of ADR now. 


• 

After many years of mandatory arbitration requirements that have
yielded perhaps unfair processes or results, groups that believe they
should not be forced into ADR by mandatory arbitration clauses are
building momentum for their position in Congress. 


• 

If the AFA passes, that will not be the end of the story, however. New
interest groups may form to support the previous law, or a new law
altogether.

Methods of Alternative Dispute Resolution -

Lesson Summary

• The key points from this module are the following:

• Common methods of dispute resolution are negotiation, mediation,

and arbitration. 


• 

Negotiation is a skill often developed by people who are charged
with settling existing disputes or with creating new agreements. 


• 

Mediation is a method of ADR in which parties work to form a
mutually acceptable agreement.


• 

Arbitration is a method of ADR in which parties vest authority in a
third-party neutral decision maker who will hear their case and issue
a decision, which is called an arbitration award.


• 

There are many other types of dispute resolution, such as ethics
 hotline, summary jury trial, mini-trial, ombudsman, private judging,
open-door policy, and mediation-arbitration. 


• 

Mandatory arbitration clauses are common in contracts, and such
clauses are enforceable against the parties even if they wish to
litigate their claims.After many years of mandatory arbitration
requirements that have yielded perhaps unfair processes or results,
groups that believe they should not be forced into ADR by
mandatory arbitration clauses are building momentum for their
position in Congress. Congress could make ADR optional rather than
mandatory to ensure fairness between unequal parties for some
types of disputes.

Module 6 - What can ADR do?

What can ADR do? - Learning Outcomes

• On successful completion of this module, you will be able to: 

◦ Define what alternative dispute resolution (ADR) is.

◦ Explain the conditions under which ADR programs can

succeed.

◦ Identify when to implement ADR programs in the context of

rule of law assistance or other development initiatives.

◦ Describe how ADR may be able to improve women’s access to

justice.

◦ Distinguish between the characteristics of ADR approaches.

◦ Identify the goals and possible uses of ADR.

How can ADR help Accomplish Rule of Law

Objectives? – Part I

Introduction
• DR systems may be designed to meet a wide variety of different
A
goals. Some of these goals are directly related to improving the
administration of justice and the settlement of particular
disputes. Some, however, are related to other development
objectives, such as economic restructuring, or the management of
tensions and conflicts in communities. 


• 

For instance, developing an efficient, consensual way to resolve land
disputes may be critical to an AID mission not because of its
commitment to strengthening the rule of law, but because land
disputes threaten the social and economic stability of the
country. Likewise, efficient dispute resolution procedures may be
critical to economic development objectives where court delays or
corruption inhibit foreign investment and economic restructuring.


• 

 Within the context of rule of law initiatives, ADR programs can:


◦ s upport and complement court reform

◦ by-pass ineffective and discredited courts

◦ increase popular satisfaction with dispute resolution

◦ increase access to justice for disadvantaged groups

◦ reduce delay in the resolution of disputes

◦ reduce the cost of resolving disputes

• How can ADR Help Accomplish Role of Law

Objectives?
• 

• In the context of other development objectives, ADR programs
can: 

◦ increase civic engagement and create public processes to

facilitate economic restructuring and other social change

◦ help reduce the level of tension and conflict in a community

 ◦ anage disputes and conflicts that may directly impair

m
development initiatives

◦
• Experiments suggests that ADR programs can have a positive
impact on each of these development objectives, although the extent
of the impact is very much dependent on other conditions within the
country and the fit of the design and implementation of the program
with the development objectives.

• 


• 

The following matrix in the next page matches the general ADR
systems with the purposes and development objectives to which they
are best suited. Although any one ADR system can be designed in a
variety of ways, this matrix may provide general guidance on which
ADR model to choose. 


• 

The table is intended to give a general sense of the relative
advantages of different dispute resolution procedures under a wide
range of conditions. The likelihood that a procedure will satisfy a goal
in a given case depends on the details of its design, the skill and
perceived legitimacy of the dispute resolution provider, and the
behavior and beliefs of the disputants. 

How can ADR Help Accomplish Role of Law

Objectives?
Key:

           3 = High likely to satisfy goal

           2 = Likely to satisfy goal

           1 = Unlikely to satisfy goal

           0 = Highly unlikely to satisfy goal

• How can ADR Help Accomplish Role of Law

Objectives?


• ADR can support and complement court reform. 

Use ADR when:

- Case backlog impairs court effectiveness.

- Complex procedures impair court effectiveness.

- Illiterate or poor cannot afford the courts or manage their way within
them.

- Small informal systems can better reach geographically dispersed

population.

Do not use ADR when:

- The court’s reputation is sufficiently tainted to suggest that independent

programs may enjoy more popular support. 

• How can ADR Help Accomplish Rule of Law

Objectives?

• ADR programs can support a mission objective to reform the court
system in several ways.

◦ ADR can be used by the judiciary to test and demonstrate new

procedures that might later be extended to or integrated with
existing court procedures. 

◦ ADR systems can be created as an option within the judicial

system, either associated with the courts as a way of
managing existing caseloads, or separate from the courts to
provide dispute resolution for conflicts or constituencies not
well served by the courts. 

◦ If the main problems with the courts are complex and

inappropriate procedures, rather than institutional corruption or
bias, ADR programs can provide streamlined procedures to
accelerate case disposition. In some cases, these procedures
may serve as models that can later be incorporated into formal
court procedures. If so, court-annexed ADR may turn out to be
a catalyst for more extensive court reform. 

◦
• Court-annexed ADR programs in Argentina, Colombia and Uruguay
are evolving as an integral part of programs for overall court reform. 

• 

ADR programs can also be designed to deal with cases that could
enter the court system but may be resolved more efficiently (and
perhaps with greater satisfaction) through ADR procedures.

• How can ADR help accomplish rule of Law

Objectives?

• In these cases, ADR programs can complement court reform by
reducing caseloads. They can also complement court reform by
 increasing access to dispute resolution services for disadvantaged
groups (e.g. urban neighborhood and rural centers), providing legal
advice to members of disadvantaged groups on whether and how to
use the court system, and/or dealing with specialized cases that the
courts are not well-equipped to handle (e.g. complex commercial
disputes, labor-management disputes).

Example

The San Juan Dispute Resolution Center in Puerto Rico is an interesting

model for using an ADR service center to increase access to dispute
resolution systems by directing disputes to appropriate fora. The Center,
which has been operating since 1983, acts as a clearinghouse for
complaints, providing advice to users and referrals to other agencies and
courts, as well as mediation services for appropriate disputes. The Center
provides more than 2000 referrals each year, and use of the Center has
increased regularly since its founding. The Center claims to have had a
significant impact on reducing court backlogs. Although the lack of
documentation of the Center precludes clear conclusions about its
success, the concept of using a mediation center to assess cases, provide
advice, make referrals, and mediate appropriate disputes is attractive for
reaching poor and uneducated populations who may be intimidated by
formal court systems.

• ADR can by-pass ineffective or discredited courts.

Use ADR when:

- Working within the existing judicial system is unlikely to be effective or

receive popular support.

- Complex or technical disputes can be handles more effectively by

specialized private ADR systems.

Do not use ADR when:

- Official opposition is sufficiently strong and controlling to suppress

competing programs. In these cases, links to the official judicial and
legal system may be necessary for success. 

When the civil court system has so many institutional weaknesses and
failures (inadequate resources, corruption, systematic bias) that there is no
near-term prospect of successful civil court reform, ADR programs may be
an appropriate way to provide an alternative forum. 

• ADR can by-pass ineffective or discredited courts. 

◦ Justice for populations not well-served by the courts.

◦
• In South Africa, India, and Bangladesh, ADR programs were
developed to by-pass corrupt, biased, or otherwise discredited court
systems that count not provide reasonable justice for at least certain
parts of the population (blacks, the poor, or women). 


• 

In Sri Lanka, the reputation of the courts is relatively good, but they
were ineffective in resolving many local and small disputes because
of high costs and long delays. The Mediation Boards there have
evolved as a substitute for the courts, but enjoy the support of the
judicial system. 


• 

Bolivia, Haiti, Ecuador, and El Salvador are developing systems
involving government support for independent, local, informal,
dispute resolution panels to serve parts of the population for whom
the courts are ineffective. 


• 

Some ADR programs function as the primary institutions for
resolving civil disputes, and have effectively replaced or preempted
courts. Taiwan and China have the best examples of broadly and
deeply institutionalized, community-based ADR. In both countries,
local government officials and well-respected citizens act as
conciliators, mediators, and arbitrators for the vast majority of local
disputes. 


• 

Taiwan’s ADR system appears to be growing more popular over time,
despite social changes that have begun to erode Confucian norms of
deference to local notables. 

Example

In China, there are now more than one million village-based People’s
Mediation Courts, which were created by the 1982 constitution.
Participation in mediation is voluntary in principle and disputants can take
their cases to court if mediation fails. The PMCs handle more than seven
million civil cases each year, including family disputes, inheritance issues,
land claims, business disputes, and neighbor conflicts. These ADR
institutions have evolved not as attempts to substitute for a failing court
system, but rather as an outgrowth of traditional, local institutions that
have long functioned as alternatives to the civil courts.

How can ADR help accomplish rule of Law

Objectives?
ADR can by-pass ineffective or discredited courts. 

◦ Efficient and satisfactory resolution in highly- technical,

specialized areas.

◦
• pecialized ADR programs focused on particular types of technical
S
or complex disputes can be more effective and produce better
settlements than courts. In the United States, specialized ADR
programs deal with construction, environmental, and patent
disputes, among others. These programs act as substitutes for the
courts, which may not have the expertise necessary to make the
best decisions. In developing countries, specialized ADT programs
for commercial disputes are being tried in Uruguay, Thailand, Bolivia,
and Ukraine. Private labor-management ADR in South Africa has
been so successful that the government has adopted mediation and
arbitration as the primary mechanisms for resolving labor-
management disputes. 


◦ Ethnically-based, public and family disputes. 

◦
• ADR programs may also me more effective than the courts for
addressing particular types of disputes, such as ethnic conflicts,
public environmental disputes, or family disputes. In such cases,
specifically designed ADR programs may create more attractive
alternatives to the courts even when the courts are functioning
 reasonably well. National government agencies may develop issue-
specific ADR systems designed to precede or parallel formal
administrative hearings. In the Philippines, The Department of
Environment and Natural Resources has created provincial multi-
stakeholder committees to receive and resolve land claims by
indigenous peoples. 

In Malaysia, national government officials are being trained by the
Department of National Affairs to manage interethnic disputes that
arise in the course of their work.

How can ADR help Accomplish Rule of Law

Objectives? – Part II

Introduction

ADR systems may be designed to meet a wide variety of different goals.

Some of these goals are directly related to improving the administration of
justice and the settlement of particular disputes. 

Some, however, are related to other development objectives, such as

economic restructuring, or the management of tensions and conflicts in
communities. 

For instance, developing an efficient, consensual way to resolve land

disputes may be critical to an AID mission not because of its commitment
to strengthening the rule of law, but because land disputes threaten the
social and economic stability of the country. 

Likewise, efficient dispute resolution procedures may be critical to

economic development objectives where court delays or corruption inhibit
foreign investment and economic restructuring. 

• ADR can increase satisfaction of disputants with outcomes

Use ADR when

- High cost, long delay, and limited access undermine satisfaction with
existing judicial processes.

- Cultural norms emphasize the importance of reconciliation and

relationships over “winning” in dispute resolution.

- Considerations of equity indicate that creativity and flexibility are needed

to produce outcome satisfactory to the       parties.

- Low rates of compliance with court judgments (or a high rate of

enforcement actions) indicate a need for                   systems  that
maximize the likelihood of voluntary compliance.

- The legal system is not very responsive to local conditions or local

conditions vary. 

Do not use ADR when

- Cultural norms suggest a preference for formal, deterministic solutions.

- Cultural norms are discriminatory or biased and would be perpetuated

in the ADR system.

Although increasing the satisfaction of disputants is one of the

development objectives identified by earlier USAID studies, user
satisfaction is often an indirect proxy for more focused concerns such as
cost, access, and delay. Beyond these aspects, disputant satisfaction is
also affected by more subtle factors, such as the creativity of outcomes,
the impact of the ADR process on the ongoing business or personal
relationships, and disputant confidence that the system is responsive to
their needs. 

ADR programs can have a positive influence on all of these components of

disputant satisfaction. 

When evaluations of ADR systems have included an assessment of overall

user satisfaction, the ADR systems have generally compared favorably to
formal legal structures. 

Sri Lanka Example

n Sri Lanka, satisfaction with the Mediation Board system is quite high. 

In addition to the accessibility of the system, and the low cost, disputants
indicate that the way they are treated, the disputants’ control of the
process, and the community-based nature of the system are all factors
leading to high satisfaction. 

Satisfaction is also reflected in the settlement and compliance rates.

Nearly 65% of all mediated cases are settled, and compliance rates, while
not accurately measured, are reported to be high.

The chairman of one Mediation Board indicated that compliance with

debtor dispute settlements, which constitute a large proportion of the
cases, is nearly 95%. The monthly caseload of the Boards more than
doubled between the first and third years of operation, indicating high
satisfaction.

United States Example

In the United States, many users of ADR services cite flexibility and
creativity of the process, and note that the settlements are generally better
for both parties than decisions produced through litigation. 

This advantage reflected in the comments of users in Sri Lanka and

Bangladesh who note the benefits of a local mediator, who understands
local conditions, knows the parties, and can help guide a settlement that
fits the situation. 

Other Example 

In Bangladesh, almost all users indicate that they prefer mediation to the
formal court system and would use the mediation process again. 

In South Africa, users of commercial labor-management mediation and

arbitration cite the positive impact of ADR, relative to litigation, on
ongoing labor-management relations.

And throughout Southeast Asia, disputants cite general cultural preference

for informal dispute resolution because of its ability to help reconcile and
preserve personal and commercial relationships.

• ADR programs can increase access to justice for disadvantaged

groups.

Use ADR when

- Use of formal court systems requires resources unavailable to sectors of

the population.

- Formal court systems are biased against women, minorities, or other

groups.

- Illiteracy prevents part of the population from using formal court systems.

- Distance from the courts impairs effective use for rural populations.

Do not use ADR when

- Disadvantaged groups need to establish rights in order to reduce power

imbalances.

- Local elites have the power to control program implementation.

- A number of barriers to access to the justice system can be addressed

effectively in an ADR program.

◦ Reducing the cost to parties.

◦
• Many poor are denied access simply because they cannot afford to
pay the registration and representation fees necessary to enter the
formal legal system. 

◦ Reducing the formality of the legal process.

◦
• Several studies indicate that the formality of court systems
intimidates and discourages use. 

India and Bangladesh

The court requirement of legal representation is both costly and

intimidating for people who may not be comfortable interacting with
lawyers from a different caste or class. 

In these and other countries, users of ADR programs have expressed a

preference for submitting cases to mediators who are local residents and
understand the local community.

Sri Lanka

Users expressed their satisfaction at having their “stories” heard in an

informal process. 

All of these factors contribute to greater usage of and preference for

informal processes. 

◦ Overcoming the barrier of illiteracy

◦
• In some countries, access is effectively denied because the formal
system requires a level of literacy that many in the country do not
have. In these countries, the formal legal processes are especially
intimidating for large numbers of illiterate citizens. In Bangladesh, the
Madaripur Legal Aid Association was originally established to
provide assistance and representation for the poor and illiterate.
Their services are now dominated by their mediation to be more
effective and accessible for this part of the population. 


• 

ADR programs can be designed to rely on oral representations. Oral
agreements may be enforced by traditional means of community
peer pressure, eliminating the need for written documentation or
formal enforcement mechanisms.


◦ Serving rural populations: reducing geographic dispersal of

centers

◦
• Access may be impaired because the courts are located far from the
homes of those who need them. One advantage of ADR programs is
the ability to set them up with relatively little cost to local
communities. The lok adalat ("people's court") system in India
 succeeded in reaching a large part of the population because they
were located in villages. 


• 

Similarly, the Mediation Boards in Sri Lanka are distributed
throughout rural villages, as well as larger cities and towns. In China,
more than one million People's Mediation Centers are located in
villages and serve parts of the population that could not easily reach
existing courts 

◦ Counteracting discrimination and bias in the system

◦
• When courts are systematically biased against particular groups,
such as minorities or women, ADR programs can sometimes help
provide some measure of justice. In some circumstances, ADR will
not improve access for discriminated-against populations and may,
some argue, even worsen their situation. 


• 

Informal dispute resolution services may offer “second-class” justice 
to users, particularly minorities and women who may be subject to
bias in ADR programs as well as in the formal judicial system.
Informal dispute resolution systems are ineffective at changing policy
and systemic injustice since they deal with individual cases and do
not establish legal precedent. 

In Bangladesh

Women are often poorly protected by the courts. The MLAA mediation
program, has recruited women to serve on mediation panels in the village
mediation program. Women who have used the system believe that they
receive better protection and more compensation from this system than
from the formal court system. The ADR program design is able to address
the issue of bias through recruitment of minority mediators and thorough
training, justice can be improved for these disadvantage groups.

◦ Public outreach to increase awareness of ADR

◦
• In some situations, the judicial system or new ADR mechanisms may
have changed in ways that could increase access, but the
 but the disadvantaged may be unaware of the changes because of
inadequate public outreach. If one of the goals of the ADR program
is to increase access to justice for a particular target population, the
program design must include adequate means for reaching that
population. Stating the goal is not sufficient, and in the absence of
specific design focus, there is a risk that the system can be co-opted
by elites. 

Example

One of the original goals of the Colombian Conflict Resolution Project was
to provide low cost services to the disadvantaged. The client base of the
Bogota Chamber of Commerce, however, through which much of the
program was managed,was comprised of business elites. The program
became focused more on providing low cost services to small businesses
than to poor populations. The original design of the project omitted a clear
definition of the target client population, and failed to establish any goal for
reaching the target population. This resulted in a failure to create any
public outreach or publicity campaign to increase awareness and use of
the services among the poor.

How can ADR help Accomplish Rule of Law

Objectives? – Part III

• ADR programs can reduce delay in the resolution of disputes.

Use ADR when:

- Delays are caused by complex formal procedures.

- Court resources are insufficient to keep up with case    backlog. 

Do not use ADR when:

- Official intervention will impose complex procedures      on ADR

programs.

Delays are endemic in most court systems throughout the world and affect
a number of development objectives. In some cases, delays are so
extreme that they effectively deny justice, particularly to disadvantaged
groups who may not be able to “grease the wheels” of the justice system. 

In other cases, delays in the resolution of commercial disputes impair

economic development and undermine the efficiency of the economy.
Informal dispute resolution (mediation and settlement programs), or
simplified procedures for dispute resolution (arbitration systems), can
significantly reduce dispute resolution delay, and indirectly reduce court
backlog by redirecting cases that would otherwise go to court.

Reduction of dispute resolution delays may serve a variety of USAID

strategic objectives outside the rule of law area. For example, in the
Ukraine, support for mediation centers is founded on the premise that
mediation can serve economic development objectives by accelerating the
resolution of commercial and labor-management disputes, as well as other
civil disputes arising from the privatization process. 

In South Africa, quick resolution of labor-management disputes serve both

economic and social equity. 

Many studies of developing country ADR systems offer evidence that the
systems have been effective in processing cases quickly, at least relative
to traditional court systems. 

Sri Lanka

The Mediation Boards in Sri Lanka resolve 61% of cases within 30 days
and 94% within 90 days, compared with months or years required by the
court system. 

Court backlog in Sri Lanka was reduced by nearly 50% during the six
years in which the Mediation Boards have operated there, although a
direct empirical link has not been established. 

Ukraine

One judge in the Ukraine predicted that 90% of civil court cases could be
successfully mediated, eliminating the backlog on the civil court dockets. 

 Other

Studies of programs in China, India, Costa Rica, and Puerto Rico similarly
indicate that ADR systems have been successful in handling large
numbers of cases quickly and efficiently. 

However, studies showing that ADR systems deal with cases more quickly
than the courts often do not address systematically the question of
whether cases resolved by ADR are similar to or different from cases
resolved by the courts, which could explain some differences in time to
resolution.

Experience in the United States indicates that ADR can have a significant
impact on the time required to reach a resolution. A study conducted by
the State Justice Institute at the University of North Carolina compared
cases assigned either to a mediated settlement conference (MSC) or
directly to the superior court. 

The MSC program reduced the median filing-to-disposition time in

similarly contested cases by about seven weeks, from 407 days to 360
days. In addition, participants were significantly more satisfied with the
process and the outcomes of the MSC process than they were with the
normal court process. Certain types of ADR, like arbitration, may be
susceptible to becoming as complex and costly as court litigation. 

Labor arbitration in the United States has also become encumbered with
formal rules and regulations that limit its ability to operate efficiently.
Delays in resolving disputes may increase when pilot or local ADR
programs are expanded, if human resources are insufficient to handle the
increased caseload efficiently.

Studies

Some studies in the United States, indicate that ADR programs attached
to the courts become burdened by the same administrative complexities
and/or costs as the normal litigation process. A recent controversial study
by the RAND Corporation indicated that federal district court ADR
programs (specifically, mediation and early neutral evaluation) have not
been effective in proving that ADR can reduce delays or costs associated
with dispute resolution.

• ADR programs can reduce the cost of resolving disputes.

Use ADR when:

- High costs in the courts are driven by formal procedures or the

requirement of legal representatives.

- Court filing costs are high.

- Court delays impose high costs on parties.

Do not use ADR when:

- Official intervention will impose formal procedures or costs on ADR.

Many ADR programs are designed with a goal of reducing the cost of
resolving disputes both to the disputants and to the dispute resolution
system. Where ADR fulfills this goal is still under discussion even in the
United States, where there have been many studies of the issue. 

Example

During the 1980s, when the lok adalat system was operating successfully
in India, a comparative study in Rajasthan indicated that the average cost
of a case handled in a lok adalat court was 38 rupees, compared with an
average litigation cost of 955 rupees. The primary reason for the difference
in cost was the simplicity of the system and the lack of need for legal
representation, compared with the extreme complexity of the formal court
system and the requirement of expensive representation.

Nevertheless, the experience of at least some of the ADR systems

implemented in developing countries indicates that cost reduction is a
reasonable goal for ADR systems, and that well-designed systems can
effectively meet this goal. 

Relatively few comparative studies have been concluded, in part because

of the lack of data on the true costs of court dispute resolution. Several
studies, however, indicate dramatic differences in cost. 

Many other ADR programs seem to be successful in reducing the cost of

dispute resolution and providing access to justice for the poor. 

Most programs operate with only a modest fee, either because they are
managed by volunteers or because they are supported by government or
donor funds. 

Example

In Sri Lanka, the cost of filing for medication is only 5 rupees, and the
number of cases filed with the Mediation Boards has increased from 13,
280 in 1991 to 101,639 in 1996. Almost all of the cases involve
disadvantaged and poor members of the population.

How can ADR help Accomplish other

Development Objectives?

• ADR programs can prepare community leaders, increase civic

engagement, and create public processes to facilitate economic
restructuring and other social change.

Use ADR when

- Initiatives are hindered by an absence of participatory public processes

to build support for and help manage                change.

- Initiatives are hindered by a low number of trained leaders among

disadvantaged group.

Do not use ADR when

- Legal rights need to be established or enforced to reduce power

imbalances.

- Relationship between ADR and the formal legal system needs to be

clarified to reduce uncertainty about dispute    resolution options.

- Change is needed quickly (the impact of ADR training and programming

is incremental and long-term). 

South Africa is an interesting, and in many ways unique, example of the

potential impact of dispute resolution and conflict management systems
on social structures. A number of ADR programs have been part of the
social fabric in South Africa, both before and after the transition in
government. Many observers credit the example set by black labor unions
in their negotiations with mining company management with
demonstrating the ability to work out differences between blacks and
whites at the bargaining table.

It was not a coincidence that the lead negotiator for the African National
Congress in the transition talks was Cyril Ramaphosa, who had led
negotiations for the miners unions.

- Experience in other countries suggests similar usage of ADR to address

a variety of social change and development issues through public
processed in which facilitation and mediation skills play a major role. In the
Philippines, conflict resolution processes are being used to manage land
reform and in the Ukraine, mediation training and facilitators are helping to
manage economic restructuring issues in the mining and steel
industries. Past authoritarian governments in Ukraine did not encourage
public participation or public processes to develop consensual initiatives
or solutions to social problems. Mediation training in individual
manufacturing enterprises is helping to develop an ethic of civic
engagement that is not general in the society. 

The impact of ADR programs on social change is often felt through the
increased skills and abilities of local leaders. In South Africa, observers
note that NGO-sponsored ADR programs helped develop and train
community leaders. Many of those trained as part of ADR programs have
gone on to hold significant positions in the post-apartheid government. 

The ADR training and experience helped build skills in consensual

approaches to problem-solving and policy development. As a further sign
of the importance of the problem-solving and management skills
associated with ADR experience, USAID and other international donors
have supported IMSSA’s dispute resolution training of industry groups and
communities, as well as its elections and balloting project. USAID also
gave IMSSA responsibility for supervising an umbrella grant for
community-level dispute resolution activities. 

Programs aimed at providing dispute government leaders have been

conducted in a variety of other transition countries, including Angola,
Rwanda, and Russia. Programs have also been developed to pursue
specific development objectives. 

Like most capacity-building initiatives, ADR programs require a substantial

amount of time to have a significant impact on leadership skills, the ethic
of civic engagement, and public problem-solving processes. The
significant impact felt in South Africa evolved over a decade, and only with
the support of a variety of ADR initiatives.

• ADR programs can reduce the level of tension and prevent conflict
in a community. 

Use ADR when:

- Ongoing structural conflicts heighten the level of tension in or between

communities.

- Unresolved individual disputes add to the level of tension in society.

- Moderate ethnic or class conflict is focused around particular issues.

Do not use ADR when:

- Group leaders will not negotiate until there are structural changes in the
balance of power between classes or ethnic groups.

- Individual disputes cannot be resolved until some structural change

takes place.

• How can ADR help Accomplish other

Development Objectives?

• ADR systems may be designed to have an impact on the level of
social tension and latent conflict, as well as on individual disputes.
 The focus of these systems is somewhat different from the programs
normally designed for rule of law projects. Many of the NGOs
established to promote conflict management in South Africa prior to
the transition of power were explicitly created with the goal of
managing tension and fostering peaceful mechanisms for social
transformation. 

• 

Although many observers believe these efforts had a positive impact
on the culture and contributed to the peaceful transition, the direct
impact of these programs on the overall level of violence and tension
in the community is difficult to assess. Nevertheless, other countries
have undertaken similar efforts to manage social tension.

• In Cyprus, USAID through AMIDEAST and the Fulbright Commission,

has fostered the development of a variety of conflict management
efforts to reduce tension between the Greek and Turkish Cypriot
communities, including joint camps for youth, bi-communal arts
events, and other bi-communal activities. Although the level of
tension remains high, these efforts have been credited by the
international community with reducing the potential for conflict.
Similar efforts to manage social tension, including ethnic and class
conflict, are underway in many other countries, including projects in
Estonia, Hungary, Slovakia, Bosnia, and Rwanda. The evidence for
managing conflict and tension around discrete policy issues, such as
education policies and land reform is positive. 

Example

Conflict prevention efforts generally focus more on public conflicts (ethnic

tensions, resource allocation, policy issues, etc. ) rather than private
disputes. They may also focus on public education, early intervention in
potentially explosive conflict, and outside intervention by third parties.

• ADR programs can help manage conflicts that may directly impair
development initiatives.

Use ADR when:

- Issue-specific disputes or conflicts impede sectoral development

efforts. 

Do not use ADR when:

- No counter-indications. 

When issue-specific disputes impair development progress, specifically

designed ADR programs may help. This is true for conflicts involving
multiple or polarized stakeholders with vested interests. In the Middle
East, for example, water resource disputes are a practical limit on
economic development. Disputes over water are also the source of
international and intranational tension.



Preliminary work in Jordan and Egypt indicates that government officials
recognize the need to manage these tensions as part of an overall
development strategy. Training programs for government water
development and resource officials are underway in those countries. The
success of labor-management mediation and arbitration in South Africa
led to the creation of other NGO and government ADR programs to
manage disputes in other areas critical to development. 



ADR programs have been designed to address labor-management
disputes in the Philippines and commercial disputes in Ukraine, Bulgaria,
Hungary, and Poland. 

In each case, the programs are designed to overcome specific barriers to
development and social change. 

Example

Mediation or arbitration initiatives are now developing to deal with land

claims, economic development planning, conflict and tension in the
schools, disputes within the health care system, and a variety of other
issues. Certain ADR mechanisms, such as facilitated negotiation,
conciliation, mediation, and regulatory negotiation are particularly suited to
bringing stakeholders together to reach consensus on development
initiatives.

What can ADR do? - Lesson Summary

• The key points from this module are the following:

◦ ADR programs cannot be a substitute for a formal judicial

system. However, ADR programs can complement and support
judicial reforms.

◦ ADR programs can increase access to justice for social groups

that are not adequately or fairly served by the judicial system.

◦ ADR programs can reduce cost and time to resolve disputes

and increase disputants’ satisfaction with outcomes. 

◦ ADR programs can support development objectives and law

objectives by facilitating the resolution of disputes that are
impeding progress toward these objectives.

Module 7 - What Background Conditions are

Important?

What Background Conditions are Important? -

Learning Outcomes

• On successful completion of this module, you will be able to: 

◦ Define how ADR programs resolve minor or local disputes

◦ Explain how ADR programs do not work well in cases where

power imbalance exists between parties

◦ Describe different limitations of ADR

◦ List the particular background conditions that are especially

relevant to ADR programs

◦ Explain how different background conditions are important for

ADR programs

The Limitations of ADR

Introduction

• lthough ADR programs can play an important role in many

A
development efforts, they are ineffective, and perhaps even counter
productive, in serving some goals related to rule of law initiatives. In
particular, ADR is not an effective means to:

◦ Define, refine, establish and promote legal framework.

◦ Redress pervasive injustice, discrimination, or human rights

problems.

◦ Resolve disputes between parties who possess greatly

different levels of power or authority.

◦ Resolve cases that require public sanction.

◦ Resolve disputes involving disputants or interested parties who

refuse to participate, or cannot participate, in the ADR process.

• ADR programs do not set precedent, refine legal norms, or

establish broad community or national standards, nor do they
promote a consistent application of legal rules. 

• ADR programs are tools of equity rather than tools of law. They seek
to resolve individual disputes on a case-by-case basis, and may
resolve similar cases in different ways if the surrounding conditions
suggest that different results are fair or reasonable according to local
norms.


• 

Furthermore, ADR results are private and rarely published. As long as
some other judicial mechanism exists to define, codify, and protect
reasonable standards of justice, ADR programs can function well to
resolve relatively minor, routine, and local disputes for which equity is
a large measure of justice, and for which local and cultural norms
may be more appropriate than national legal standards. 


• 

These types of disputes may include family disputes, neighbor
disputes, and small claims, among others.

 • 

In disputes for which no clear legal or normative standards have
been established, ADR may not be able to overcome power
imbalances or fundamental disagreements over norms among
disputants. On the other hand, in situations where there is no
established legal process for dispute resolution, ADR may be the
best possible alternative to violence.

Example

In South Africa, a variety of ADR processes used before and during the
transition appear to have prevented violence to some degree and helped
set the foundation for peaceful political change.

• ADR programs cannot correct systemic injustice, discrimination, or

violations of human rights. 

ADR systems often reflect the accepted norms of society. These norms
may include discrimination against certain groups and populations. When
this is true, ADR systems may hinder efforts to change the discriminatory
norms and establish new standards of group or individual rights. 

Example

In India, the lok adalats were generally credited with resolving large
numbers of cases efficiently and cheaply in the mid-1980s before the
system was taken over by the government. Women, however, did not like
the system, especially for family disputes, because resolution of disputes
were based on local norms, which were often discriminatory towards
women, rather than on more recently defined legal rights. The same was
true for members of lower castes.

• ADR programs do not work well in the context of extreme power

imbalance between parties. 

These power imbalances are often the result of discriminatory norms in

society, and may be reflected in ADR program results. Even when the
imbalance is not a reflection of discriminatory social norms, most ADR
systems do not include legal or procedural protections for weaker parties. 

A more powerful or wealthy party may press the weaker into accepting an
unfair result, so that the settlement may appear consensual, but in fact
result from coercion. For the same reason, ADR programs may not work
well when one party is the government. When the program design has
been able to enhance the power or status of the weaker party, ADR has
been effective in conditions of discrimination or power imbalance. In
general, ADR programs cannot substitute for stronger formal protections
of group and class rights. 

Example

In Bangladesh, women who have submitted cases of spousal abuse to

mediation have found that the village mediation system, which includes
women mediators, provides better results than the court system which is
even more biased against women in these cases.

• ADR settlements do not have any educational, punitive, or deterrent

effect on the population.

Since the results of ADR programs are not public, ADR programs are not
appropriate for cases which ought to result in some form of public
sanction or punishment. This is particularly true for cases involving violent
and repeat offenders such as, in many cases, domestic violence. 

Societal and individual interests may be better served by court-sanctioned

punishment, such as imprisonment. It is important to note, however, that
victim-offender mediation or conciliation may be useful in some cases to
deal with issues unresolved by criminal process. 

• It is inappropriate to use ADR to resolve multi-party cases in which

some of the parties or stake holders do not participate.

This is true because the results of most ADR programs are not subject to
standards of fairness other than the acceptance of all participants. When
this happens, the absent stakeholders often bear an unfair burden when
the participants shift responsibility and cost to them. 

ADR is more able than courts to include all interested stakeholders in

disputes involving issues that affect many groups, such as environmental
disputes. When all interested parties cannot be brought into the process,
however, ADR may not be appropriate for multi-stakeholder public or
private disputes. 

• ADR may undermine other judicial reform efforts.

There is concern that support for ADR may siphon money from needed
court reforms, draw management and political attention from court reform
efforts, or treat the symptoms rather than underlying causes of problems. 

While these concerns are valid, they will rarely materialize if ADR programs
are not designed to substitute for legal reform. In most cases, ADR
programs will be far less  expensive to start and operate than broad-scale
judicial reform efforts. 

In general, ADR programs reduce costs for the state, and therefore, for
donors, at least as much as they reduce costs for disputants. ADR
programs do not necessarily draw attention away from problems that can
only be addressed through formal justice processes, as long as both
development officers and government officials keep in mind the limitations
of ADR programs. 

Example

In Ukraine, the USAID mission considers the mediation program to be very

inexpensive compared with other rule of law programs. In Sri Lanka, the
Mediation Boards resolve cases at a fraction of the cost the government
would incur through the ordinary court system.

Adequate Political Support

Introduction
• DR programs, like any other development programs, are more likely
A
to achieve their objectives when they operate within a hospitable
context. 


• 

The particular background conditions (i.e., conditions independent of
the specifics of program design) that are especially relevant to ADR
programs include: 


◦ adequate political support 

◦ supportive institutional and cultural norms 

◦ adequate human resources

◦ adequate financial resources

◦ rough parity in the power of disputants

◦
• These conditions are almost too obvious to state, but the particular
way they influence ADR programs is worth considering before
deciding whether to launch an ADR effort. While no one of the
conditions is alone sufficient to create a context in which ADR will
succeed, the absence of any one of these contextual elements could
prove fatal to an ADR program. 

• Reasons for Needing Political Support


• Reasons for needing political support include:

◦ Securing legislative support to establish jurisdiction and

authority

◦ Obtaining bureaucratic protection from resource cuts

◦ Obtaining financial support

◦ Building popular acceptance and use

◦ Overcoming opposition of vested interests

◦
• Constituencies whose support may be necessary:

◦ Local community leaders (most critical for success)

◦ National and state government

◦ Judges and the bar

◦ Advocates and representatives of user groups

◦ Foreign donor nation/foundation(s)

• The Level and Source of Political Support 

• 

• The level and source of political support for dispute resolution
programs is an important factor in determining the potential success
of, and appropriate design for, an ADR system. 


• 

Different kinds of ADR programs require support from different
constituencies. Community-based programs will need at least the
support of the beneficiaries and the local community leaders in which
the programs will operate. 


• 

For many programs, the local community leaders will also be
important sources for design information and mediator or arbitrator
nominations. They will also be influential in lending prestige to the
program and supporting community enforcement of settlements.
Their support is almost always critical for success. 

• Adequate Political Support


• 1. Building Political Support


• 

A national system, supported and managed by the national
government, requires high level political support. Such support
should be capable of ensuring the passage of an adequate statutory
basis for the system, protecting the system from attacks by other
programs that may feel threatened, and ensuring adequate financial
resources. Such support should also be “popular” in the sense that
the source of that support should hold the confidence of the
people. If the program is fostered by an agency or government
already discredited by corruption or ineffectiveness, the system will
not gain popular acceptance. 


• 

Ideally, a high level official – a minister or agency head – will lead the
effort, with a supporting coalition including representatives of the
court system: administrators, judges and lawyers, representatives/
 advocates of potential ADR user groups, and foreign donors. 


• 

The mediation program in Uruguay has successfully developed a
strong coalition that has been able to build financial, political, and
popular support for the program. So far, the strong coalition in
Uruguay has been able to overcome opposition from judges. Good
program design can help build political support, intentionally or not. 

Example

In Bolivia, the USAID mission supported the first ADR program

(commercial arbitration and conciliation) for the benefit of politically
influential sector (small business), and implemented it through a politically
powerful ally, the Chamber of Commerce. Once the legal foundations for
this program were established, other programs, such as community justice
centers for disadvantaged parts of the population could be planned.

• 2. Dealing with Opposition

• The source, level and strength of political support must be sufficient

to neutralize opponents of ADR who have the political power to
block it. 


• 

In addition to institutional opposition stemming from bureaucratic
ego and issues of control, the more powerful sources of opposition
are usually economic. Judges, lawyers, and interest groups that
benefit from current institutional biases may all be sources of strong
opposition to ADR programs. 


• I f initial analysis indicates opposition from such powerful groups,

then program designers must choose whether to rely on high level
supporters to overcome that opposition, build financial and other
incentives into the program to reduce the opposition, or to bypass
the opposition by establishing a program that functions locally and
independently. 


• 

It may be possible to co-opt opposite groups by involving them as
ADR program supervisors and/or staff. This is a risky strategy,
 however, and has probably failed at least as often as it has
succeeded. 

Example

Lawyers felt they were losing cases and fees to the lok adalat (”people’s
court”) system in India, and probably helped persuade the government to
take over the system and undermine it. In India, the lok adalat system was
functioning well and widely supported when independent of the judiciary.
When the government passed legislation forcing the lok adalats to be
managed by the court system, it was thought that the judiciary would
support the system once it was in control. Instead, the judiciary cut
funding and mismanaged the program, which quickly lost the confidence
of the users.

• 3. Bypassing the National Level

• Proponents of ADR may find opposition to the program at a national

level, but support for the program at a local level. In such cases, it
may still be possible to establish local ADR programs to address
local concerns. 


• 

The lack of national political support is not necessarily the death
knell of an ADR system. Local ADR systems can still function well as
long as they have strong user support, adequate financial resources,
and as long as they do not spark an “immune system” reaction from
a national government that might seek to actively close such
systems.

Example

Prior to the transition of government in South Africa, local “people’s

courts” were established in a number of black townships to bypass
illegitimate and ineffective government court systems. These courts and
mediation programs succeeded in reducing levels of violence and
resolving local conflicts, and maintained local township support, despite
opposition from the national government.

The experience of IMSSA in particular, and of NGOs working in South

Africa in general, has been that political support at the national level may
not be necessary. 

In fact, in a system as politically illegitimate as the apartheid government

was in South Africa, it may be unwise to seek political or official support
for an ADR program. 

• 4. Support for Issue-Specific ADR

• If the judiciary will not support ADR programs for all civil disputes,
defined beneficiaries may support specific programs focused on
particular types of disputes. 


• 

In South Africa, IMSSA focused on labor-management disputes.
Demand from both labor and management was high. Once the
programs demonstrated their effectiveness, they were supported by
the corporate community. 


• 

Management found that informal NGO mediation and arbitration
services could resolve cases more efficiently than the government
structures. This corporate community support helped protect the
NGOs from efforts to undermine the programs. 

Supportive Cultural Norms

About Supportive Cultural Norms

• Reasons for needing supportive cultural norms:

◦ User acceptance of informal processes

◦ Appropriate standards for settlements

◦ Enforcement through community customs and sanctions

◦
• Important elements of cultural norms:

◦ Traditional usage of informal, community-based dispute

resolution

◦ Shared, reasonable standards of fairness and equity

 ◦ n absence of generally accepted and strong discrimination or

A
bias, at least regarding potential users of the ADR processes

◦ An absence of generally accepted or expected corruption, at

least at a community level, or traditional mechanisms for
dealing with corruption

◦ Values of honor or honesty which promote compliance

• Sufficient Normative Background Conditions


• 1. Cultural Norms Supportive of Informal Dispute Resolution

• For ADR programs to be successful, the cultural norms of the

community should support the concept of informal dispute
settlement. Even in countries where the judicial system is discredited
and where reforms are unlikely in the short term, ADR programs can
provide a reasonable degree of justice if a tradition of informal dispute
resolution exists.


• 

Many studies cite the importance of these traditions as a background
condition for success. Such favorable traditional and cultural norms
are difficult to build if they do not exist, and should be considered
carefully as a prerequisite background condition.


• 

The absence of cultural norms which support informal third party
dispute resolution should not automatically eliminate consideration of
ADR programs. During the years of Communist Party control in the
Ukraine, the only third party with authority to decide disputes was the
local party leader. All other forms of traditional dispute resolution or
informal village authority were squeezed out of the system. When the
Communist Party structure collapsed, there were no traditional
dispute resolution mechanisms on which to build. 


• 

Experience with the authoritarian party dispute resolution system has
made the population reluctant to submit disputes to a third party. In
addition, the concept of voluntary mediation, in which the mediator
has no authority to force a settlement, is foreign. If the program
design is able to incorporate an effective way of building those norms
 in the long-run and operating despite their absence in the short-run,
then it may be worth investing in ADR.

Example

The UMG in Ukraine is a good example. The ADR program these

addressed these challenges by starting in a sector more receptive to ADR
methods and by focusing on a credible local mediator, whose familiarity
with Western and Soviet-era ADR and whose commitment to the program
have helped make it successful.

• 2. Existence of Standards of Justice Widely-Perceived as Fair

• Sufficient normative background conditions should include not only

support for informal dispute resolution processes, but also
reasonable standards of justice and equity. If the cultural norms of
behavior are fair and reasonable, ADR may be an appropriate
mechanism for applying these norms to resolve individual disputes in
an informal manner. If the norms are unattractive or unfair, however,
then  mediators drawn from a pool of citizens reflecting those norms
are likely to mediate or impose unfair settlements.


• 

Fair and reasonable standards of justice should not include strong
discrimination or bias against any potential user group. If the
accepted standards of justice embrace discrimination against part of
the population, or abuse the rights of certain individuals, informal
dispute resolution systems will usually reflect those standards. 


• 

In the absence of any legal requirement to resolve cases according
to legal guidelines, mediation and arbitration systems will generally
produce results that follow cultural norms of justice. On the other
hand, as noted earlier, even in countries where discrimination is
present, ADR programs specifically designed to compensate for
such discrimination may provide better justice than a biased court
system. many women found this to be true in Bangladesh. In
general, however, ADR systems cannot be expected to reform
attitudes about group or individual rights.

 


• 

In some cases, the traditional conflict resolution processes embody
levels of bias and class stratification that USAID would not want to
promote. It is important not to assume that the existence of
traditional mediation implies that an expanded ADR effort will be
widely accepted by the part of the population. Assessing the support
for such informal dispute resolution among the target population is
critical.


In Indonesia, mediation efforts to resolve environmental disputes ran into

opposition from some parts of the population who felt that traditional
mediation, musyawarah, reinforced class hierarchy and authoritarianism.

Example

Norms Supporting Discrimination: ADR in Japan

Following World War II, the reformed Japanese government established

the Civil Liberties Bureau (CLB) to mediate disputes relating to social
rights. One goal of the CLB was the creation and protection of individual
and group rights for disadvantaged parts of the population. Although the
strong normative culture of Japanese society helped the CLB resolve
many disputes, cultural discrimination against certain groups was also part
of the accepted normative systems and could not be redressed effectively
through the CLB mediation and ombudsman processes.

• 3. Cultural Norms Against Corruption

• Corruption in the formal legal system may be a motivation for

creating an alternative system. If local norms and local control of
ADR systems can avoid corruption, and if alternative means of
enforcement can avoid the need to depend on the formal judicial
system for enforcement, ADR systems can succeed where formal
systems have failed.


• 

Broad-based cultural norms which accept corruption even at a local
 level, however will complicate program design, increase its cost, and
reduce its chance of success.


• 4. Cultural Norms Favoring Voluntary Compliance

• Although in general it is important that the particular ADR process

employed should be consistent with broadly-held traditional norms,
it is also important to ask why traditional dispute management
systems have failed and whether the same conditions will undermine
the proposed ADR system. 


• 

Cultural norms regarding compliance with agreements are often
important for ADR program success. In the Middle East, traditional
cultural norms have held families responsible for the agreements of
family members. This norm is extremely effective in promoting
compliance. As Western law has taken precedence, and as families
have become more mobile and less cohesive, this cultural norm is
losing strength, and traditional mediation by village elders is losing
prominence. 


• 

It is not clear whether a community-based ADR system can reinforce
or substitute for these traditional mediators. 

Adequate Human Resources

About Adequate Human Resources

• Reasons for needing adequate human resources:

◦ A sufficient pool of skilled and respected mediators or

arbitrators to manage caseload efficiently and effectively.

◦
• Important elements of human resources:

◦ Community members and leaders who have the respect of the

community.

◦ Honesty and a sense of community service among potential

mediators.

 ◦ esources and skills necessary to prepare an adequate

R
training program.

◦
• Adequate numbers of well-qualified and well-supervised ADR staff
are essential to program success. Evidence from the U.S. suggests
that the quality of ADR staff is much more important to participant
satisfaction with ADR outcomes than ADR’s cost, the time it takes,
or its specific procedures. 


• 

Similarly, user satisfaction with Sri Lanka’s Mediation Boards is much
higher than with the previous conciliation system, largely because
much greater care has been taken to select, train, and supervise
community mediators based on merit, not political
connections. Several factors affect the quality of the ADR staff: 

• Factors that Affect the Quality of the ADR Staff


• 1. Honest and Respected Personnel

• A large pool of educated, honest, and respected personnel is not

always available, but it may be critical for success. 


• 

In Sri Lanka, the Mediation Board system has depended on high
numbers of educated citizens who have volunteered to be mediators,
including many school teachers, clerics, postal workers, and other
civil servants respected in their communities.

The strong sense of community service among these mediators has been
important, and may not be present in all countries. Mediators must have a
minimum level of education. However, the respect of the local community
is often more important to success than substantive knowledge. 

• 2. Training

• Good training, and sufficient resources to maintain such training on

an on-going basis, has been important to create a cadre of qualified
and respected mediators. 

 • 


• 

Many successful programs, like those in South Africa, Sri Lanka,
Bangladesh, and Argentina, have had good training programs as an
integral part of the design

• 3. Literacy

• In Sri Lanka, a high rate of literacy has also been important to the
Mediation Board success. The high literacy rate and an active press
help to hold public officials to a higher standard of performance than
in other developing countries. In addition, a literate public is easier to
reach and educate about mediation. 


• 4. Sufficient Numbers of Personnel

• It is important that the pool of skilled ADR staff be large enough so

that the system does not become overburdened and to avoid
personnel frustration and burn-out. 


• 

In South Africa, the large pool of mediators and arbitrators trained by
IMSSA was a significant asset since it meant that the system gained
a reputation or immediate response. Conversely, the enormous
increase in the mediation caseload of the Commission for
Conciliation, Mediation, and Arbitration (CCMA) following changes in
South African legal system threatens to overburden the mediators
and erode confidence in the system.


• 

In Sri Lanka, the most pressing concern facing the Mediation Board
system is the excessive level of work for the volunteer mediators and
trainers. Beyond such basic issues as honesty, training, literacy, and
numbers, the program design will affect significantly the adequacy of
human resources.  

Financial Resources and Parity in Power of

Disputants

Financial Resources
• Reasons for needing adequate financial resources:

◦ Costs of administration, third party personnel, evaluation, and

outreach

◦
• Important elements of financial support:

◦ Sustainability

◦ Sufficient to avoid corruption or overwork for third parties or

others implementing the ADR system

◦
• Compared with formal court processes, ADR programs are
inexpensive for the state as well as the disputants. Many programs
operate with volunteer mediators, and few have burdensome
requirements for documentation or administration. Nevertheless, in
some developing countries, governments have not allocated enough
financial resources to pay for program administration, and/or have
not trained enough volunteer mediators to make mediation a
reasonably small time commitment for volunteers.

• Financial Resources

• The Mediation Boards in Sri Lanka represent one of the most
successful ADR programs among developing countries, particularly
with regard to the development objectives of USAID. The system is in
jeopardy, however, because of the low level of financial support and
the increasing burdens on the volunteer mediators. Not only are the
mediators unpaid, but they must often cover their own expenses. 



The mediators have no offices or staff, and may need to use their
homes for mediations. They document their own work and pay for
their own office supplies. Although the system has been successful at
resolving increasing numbers of cases, the increasing burdens on the
mediators are leading to a concern that mediators may quit and that
new mediators may be difficult to find. 



In addition, some observers are concerned that some mediators may
become susceptible to corruption unless they are paid, or at least
their costs are covered.

Example

In some instances where the government is unwilling or unable to give

sufficient resources, it can provide the framework for the programs to
become self-sustaining. In Ukraine, the sustainability of the UMG would be
enhanced greatly if they could charge a fee for services, both for some
mediations and for training to wealthier audiences.

• Parity in the Power of Disputants


• Reasons for needing parity:

◦ To avoid coercive results

◦ To persuade participants to use the process

◦
• Important elements of parity:

◦ Balanced legal rights for disputants as a context for ADR

◦ Parity between individual disputants in specific cases

◦ Procedural protection for those in weaker position

◦
• ADR systems are unlikely to overcome wide disparity in the power of
disputants, or to redress discrimination, unless they can be
specifically designed to do so. 

In most cases, informal processes are less able than formal judicial
systems to produce fair outcomes in cases of wide power disparity. 


• 

As noted earlier, powerful parties retain the ability to intimidate
weaker parties in conciliation or mediation and coerce them into
accepting unfair settlements. In addition, since participation of the
disputants in most ADR programs is voluntary, stronger parties are
unlikely to participate if they feel they can obtain better results by
relying on their power and remaining outside the system.

ADR programs that operate in a context of civil war (Cambodia),

widespread repression (Philippines in the 1980s), or gross social and
political inequalities (Guatemala), will be hard pressed to attract powerful
disputants to use their services. Nonetheless, there are many civil disputes
that could be resolved through ADR even in contexts of gross political
inequality. First, if disputants in a particular case have roughly equal power
to manipulate the political, legal or social system, and ADR staff do not
have incentives to favor one disputant over another, ADR programs should
be able to resolve particular disputes despite systemic injustice. 

Village dispute resolution by local officials in Cambodia appears to be

functioning effectively in many interpersonal cases, although it is
problematic in cases involving the state, particularly land disputes. 

Second, a fairly balanced legal framework defining disputants’ rights may

allow ADR programs to deal with disputes despite power imbalances. One
of the factors in the success of IMSSA in mediating labor disputes in
South Africa, despite obvious discrimination against black and colored
workers, was the relatively strong legal framework protecting rights of
workers. 

These legal protections helped balance the otherwise unequal power of

the parties and allowed IMSSA to mediate disputes effectively. In direct
contrast, however, IMSSA has found that it is unable to mediate effectively
disputes between landlords and tenants. Tenants have so few legal rights
that mediators have not found landlords to be amenable to voluntary
settlements. The lack of legal sanction means that landlords have little
incentive to agree.

Thirdly, carefully designed ADR programs operate effectively if they correct

for situations of general social power imbalance. For example, although
the traditional shalish mediation system in Bangladesh reflected the overall
bias against women in society, the reformed system supported by USAID,
which incorporated more women into the mediation committees, has tried
to correct for this bias. 

Women users interviewed felt that the system was less biased than the
court system in handling disputes between men and women.

Some ADR programs include procedural provisions to protect against the

effects on undue disparities in power between parties. Commercial
conciliation and arbitration through the Chamber of Commerce
Conciliation Centers is focused on disputes between commercial
enterprises. 

Court-annexed conciliation focuses on family and labor disputes and is

most likely to involve middle-class litigants. Extra-judicial community
conciliation centers are being designed to provide dispute resolution for
low income citizens. 

Example

In Bolivia, for example, the Arbitration and Conciliation Law empowers the
“weaker” party in a dispute to withdraw from a commercial arbitration or
conciliation procedure unilaterally and resort to the formal court system.
Furthermore, the structure of ADR in Bolivia has evolved to focus on
disputes that are likely to occur between parties of similar backgrounds
and power.

Lesson Summary

• The key points from this module are the following:

◦ ADR results are private and rarely published.

◦ ADR programs can resolve minor and local disputes for which
equity is a large measure of justice.

◦ ADR programs are more likely to achieve their objectives when

they operate within a hospitable context.

◦ If ADR is appropriate in principle, program designers must

assess background conditions to ensure that ADR will be
feasible in practice. 

◦ The background conditions that are particularly relevant to

ADR programs include: adequate political support, supportive
institutional and cultural norms, adequate human resources,
adequate financial resources, and rough parity in the power of
disputants.

Module 8 - Program Design Considerations in ADR

Learning Outcomes
 • On successful completion of this module, you will be able to: 

◦ Describe program design considerations that will contribute to

the success of ADR. 

◦ Identify the different categories of design recommendations for

ADR.

◦ Explain how planning and preparation may help to determine

the type of ADR program that will best meet the needs of the
user population.

◦ Define how operations and implementation are important to

program design considerations for ADR

What Program Design Considerations Are

Important? – Planning and Preparation Part I

Introduction

Given the diversity of ADR programs and their institutional and cultural
settings, it is impractical to define a standard set of ADR procedures or
guidelines. 

On the other hand, an ADR program will be more likely to meet USAID
development objectives and gain popular and political support if the
design guidance provided here is followed wherever practical and
possible. Each design recommendation should be considered within the
context of the background conditions of the country and the specific
objectives of the program. While each recommendation should be correct
in the absence of countervailing indications, in some cases, exceptions
may be appropriate.

The design recommendations fall into two categories:

Planning and Preparation

- Assess dispute resolution needs and background conditions and define

program goals.

- Employ a participatory design process.

- Establish adequate legal foundations to specify jurisdiction, procedures,

and enforcement, and to define a                      relationship with the formal
legal system.

- Find an effective local partner.

Operations and Implementation

- Establish effective procedures for selection, training, and oversight of

mediators and arbitrators.

- Find or create a sustainable source of financial support. 

- Create an effective outreach and education program to reach users.

- Create support services to overcome user barriers.

- Establish effective procedures for case selection and management.

- Establish effective procedures for program evaluation.

This set of recommendations should be followed before making a decision

regarding whether to create an ADR program. The planning process will
inform development officials as to whether appropriate needs and
conditions exist to support an ADR program, and may help determine the
type of ADR program that will best meet the needs of the user population. 

• Planning and Preparation


• 1. Assess dispute resolution needs and background conditions,
and articulate program goals. 

• Any program design should be grounded in an analysis of needs and

the background conditions. The first step in a design process should,
therefore, be a careful analytical assessment, including, but certainly
 not limited to, the following elements:


• 

a. Dispute resolution needs


• 

b. ADR goals


• 

c. Assess appropriate relationship to the judiciary


• 

d. Sources of potential opposition


• 

e. The legal basis for informal dispute resolution

a. Dispute resolution needs

What are the needs for dispute resolution in the country? What kinds of
disputes are going unresolved? Are parts of the population excluded from
or underserved by existing formal structures? Are the costs of the existing
system so high that many citizens cannot participate? What disputes are
considered appropriate for informal resolution? All of these factors should
be assessed as part of an evaluation of the needs of the country.

 Once an analysis reveals a need for dispute resolution in certain areas, the
assessment should investigate the barriers that prevent individuals from
using existing formal legal structures to resolve these issues. 

These barriers may include: 

- cost

- illiteracy

- discriminatory procedure 

- perceptions of unfairness

- physical inaccessibility

- lack of proximity

- lack of awareness

An appropriate program design should address these conditions and make

sure that they are not replicated in the design of any alternative system. 

The needs may be assessed in a variety of ways. Public opinion polls may
be the most effective means for reaching all components of society.
Surveys of users of the existing formal legal system may provide insights
on user satisfaction, systemic bias, or corruption that will be important for
ADR system design. 

Interviews of interest groups and advocacy organizations can provide

information on illiterate or other underserved parts of the population who
may not respond to public opinion polls or other surveys.

Example

In Costa Rica, a Gallup poll survey determined that Costa Rican citizens
felt that family matters were the most appropriate disputes for a mediation
program. The poll also indicated that only 3% of respondents felt that the
courts alone could resolve disputes, suggesting that the public would
accept non-judicial mediation. The subsequent public response to a new
mediation center was high, with a large number of cases submitted for
mediation.

b. ADR goals

As in other development programs, a clear articulation of program goals

and priorities based on the needs assessment is essential to the program’s
success. A clearly articulated set of goals will allow program designers to
make necessary trade-offs when ADR goals conflict with other
development goals or when ADR goals are inconsistent.

• c. Assess appropriate relationship to the judiciary. (i) Judicial

training and attitudes toward ADR


• n important question to ask is whether judicial attitudes and the

A
legal culture in the country are friendly to ADR. Judicial acceptance
of ADR in Uruguay was low, in part at least because judicial training
leads judges to believe that disputes are zero sum equations, and
that proper procedure requires application of legal principles by
 principles by appropriate authorities. This has meant that judges
have been skeptical about and resistant to the implementation of
ADR practices as part of the court system. This understanding led to
a design strategy of implementing ADR through the Ministry of Labor
to deal with employer/labor disputes, rather than through the
Ministry of Justice to deal with general civil claims.


• (ii) Public attitudes towards the judiciary

• 



If the public mistrusts the government, and/or the judiciary, it is
unlikely that the public will patronize an ADR system that is managed
by them. Program designers should assess public trust in the
government as a whole, and the judiciary in particular, before
deciding whether to design a system annexed to the courts, one
sponsored by the government but independent of the judiciary, or
one entirely independent from the government

Example

In India, the lok adalat system was first implemented outside of any judicial
and governmental structure and gained wide acceptance by the people.
When the system was taken over by the state, however, public confidence
in the lok adalat system deteriorated, and usage declined dramatically.

If the public mistrusts the government, and/or the judiciary, it is unlikely

that the public will patronize an ADR system that is managed by them. 

Program designers should assess public trust in the government as a

whole, and the judiciary in particular, before deciding whether to design a
system annexed to the courts, one sponsored by the government but
independent of the judiciary, or one entirely independent from the
government

Example

In India, the lok adalat system was first implemented outside of any judicial
and governmental structure and gained wide acceptance by the people.

When the system was taken over by the state, however, public confidence
in the lok adalat system deteriorated, and usage declined dramatically.

d. Sources of potential opposition

Several constituencies and interest groups may be threatened by new

ADR systems. It is important to identify the source, strength, and reason
for this opposition as part of the analysis before program design. Strong
opposition from judges may indicate that the system should run outside
the court system. In Uruguay, the opposition of judges to the
implementation of ADR threatened to undermine the system. Strong
political and popular support for the system, and the decision to use non-
judges as mediators and arbitrators, saved the system despite this
opposition. 

Strong opposition from powerful political interest groups may suggest that
the system should be established without government support or
oversight. Strong opposition from an elite national government, but
support from local governments, may suggest a regional or locally-based
system. In any case, the assessment should identify the most likely critics
and opponents of any program and determine whether and how such
opposition can be overcome.

e. The legal basis for informal dispute resolution




ADR may need legal authorization for programs to operate. Some legal
systems may prohibit dispute resolution by private groups, others may
prohibit the collection of user fees for such services, still others may not
provide for legal enforcement of settlements or arbitration awards.
Understanding the legal context will be important for assessing the
feasibility of an ADR program, and the appropriate design for such a
program. 



A related issue is whether the type of formal legal system – civil law,
common law, based on indigenous traditions, or a hybrid of these – would
affect the ADR program. To the extent that the actors in ADR are linked to
or informed by the formal legal system (e.g. neutrals with legal training,
businesspersons in urban areas), they are likely to be more comfortable
with ADR programs that are consistent with the underlying values of the
formal system and that have a clear relationship to it (especially for
enforcement of agreements).



On the other hand, actors at the community or grass roots level are likely
to be more comfortable with ADR programs consistent with traditional
legal and conflict resolution systems than with civil or common law
systems imposed by a colonial power with which they are unfamiliar. 

• 2. Employ a participatory design process. 

• The extend of participation needed in the design of a dispute

resolution program depends on a number of factors: the nature of
the program; the source and strength of political opposition to the
project; the sophistication of the constituents; and the knowledge
and sensitivity of experts who might otherwise design the program
on their own. 


• 

If the need and demand for the program is clear, political opposition
low, and the sophistication of experts high, the design process may
succeed well under the direction of experts. In general, however,
broad participation by the affected population in the design of a
program is more likely to result in a workable program. This is
especially true when the needs are less clear, when the potential for
political or popular opposition is high, when multiple constituencies
may have an interest in the design of the system, or when traditional
systems already exist and should be considered as potential models
for a program. 

Example

In the Philippines, where labor, management, and the government had

long been frustrated by ineffective dispute resolution, a Tripartite Voluntary
Arbitration Advisory Council composed of representatives from labor,
employers, and the government helped guide the design and
implementation of a new voluntary arbitration system administered by the
National Conciliation and Mediation Board (NCMB). Observers credit the
participation of the interested sectors in the design process, as well as the
ongoing in ut of a participatory Advisory Council, with some of the
success of the NCMB, which increased the number of cases handled from
58 in 1988 to 279 in 1994.

• Planning and Preparation


• ADR systems designed to operate on a local community level may
need to reflect local community norms and traditions. For such
systems, participatory design may be very important. Some local
traditions of mediation require multiple mediators, widespread
participation of the community, or extensive rituals. 

• 

Other traditions and community norms may limit the gender or status
of those who will be accepted as mediators. Trade-offs may then
emerge: the new ADR system may have to move beyond such
restrictive traditions to further development objectives, such as
access to justice.

• The experience with the community Mediation Boards in Bangladesh

shows that a participatory design process can highlight such trade-
offs and then help designers make the necessary choices.
Involvement of potential users in program design may also help build
the political constituency for introducing ADR. 


Example

In rural areas of Kwazulu Natal in South Africa, NGOs found that they
needed to consult extensively with traditional leaders and tribal chiefs who
wanted to retain their jurisdiction over most family and community
disputes. Some local traditions of mediation require multiple mediators,
widespread participation of the community, or extensive rituals.

What Program Design Considerations Are

Important? – Planning and Preparation Part II
Planning and Preparation
• 3. Establish adequate legal foundations to specify jurisdiction,
procedures, and enforcement, and to define a relationship with
the formal legal system.

• a. Clarify the relationship of ADR to the judicial system


• 

ADR programs usually require a legal basis for operation, or at least
a legal structure that allows ADR programs to operate. In addition,
some explicit relationship with the judiciary may be
appropriate. Potential relationships include full integration with court
structures, a loose affiliation that may refer appropriate cases to
ADR, the ability to enforce ADR program settlements in the courts, or
a completely independent existence. 


• 

(i) Mandatory referral or voluntary?


• 

When ADR programs are designed to handle cases in coordination
with the judicial system, the ADR process can precede, follow, or
intercede in formal legal processes. There is no obvious reason to
prefer any one of these models. Arguably, the best model is one that
gives disputants access to an ADR process at any point in the life of
a dispute, without mandating that they use ADR.

Example

In the United States, there is a sharp debate on whether judges or

administrators should be able to require disputants to use ADR., and an
equally sharp debate on whether and how ADR settlements should legally
be enforced. Experience in the US suggests that mandatory referral to
mediation does not necessarily reduce satisfaction with the mediation
process or its outcomes.

(ii) Degree of judicial control

The degree of connection to the court system should depend largely on

the reputation and legitimacy of the courts and the nature of the ADR
system. State control and support of the ADR process has been important
and successful in some countries such as Argentina, Chile, Taiwan, and
the Philippines. In others, however, state control and management have
undermined the success of and confidence in the system in places such
as India, Costa Rica, and Mexico. 

Example

In India, where the courts were widely discredited, making ADR

settlements enforceable by the courts made disputants more reluctant to
use ADR. In south Africa, by contrast, the enforceability of arbitration
decisions in the courts was important for the success of the labor
arbitration system.

ADR’s links to the judicial system need to be designed carefully. The

Conciliation Councils were established in Sri Lanka soon after the end of
colonial power. These councils were managed by the judicial system and
had many judicial power, such as the power to subpoena testimony and
issue decreed. The councils lost the confidence of the people, however,
after they become increasingly corrupt and the appointment process
became controlled by political patronage. The councils were abolished in
1978.

The failure of the conciliation councils, however, did not necessarily mean
that any links with the judicial system would be fatal. The Mediation
Boards Act of 1988 revised the relationship to the judiciary, so that the
new Mediation Boards retain a clearly authorized relationship to the court
system. First, uniform mandatory referral to mediation before any court
action could be initiated was established for disputes valued below 25,000
rupees and many minor offenses. 

Second, the Act provided for oversight by a Mediation Commission

comprised of retired Supreme Court and Appeals Court justices. The act
also provided that all appointments be based on merit rather than
patronage and that all mediators be trained. 

Finally, the new Mediation Boards were deprived of the court-like powers
of the old Conciliation Commissions, such as the power to subpoena or
issue decrees. With these changes, the Mediation Boards have been
widely acclaimed as successful.

• (iii) The importance of clarity

• Whatever the relationship between ADR and the legal system, it is

essential that ADR users and providers understand that relationship.


• 

Providers should inform potential ADR users if using ADR means
giving up options to use the formal legal system. They should also
inform users if information they disclose during ADR might later be
used by another party in a formal legal process.

• b. Establish a clear legal foundation

• 


• I n addition to a carefully defined relationship with the judiciary, ADR

systems need enforcement mechanisms. Where the courts are seen
as legitimate (even if costly and slow) by ADR users, the courts may
be the appropriate recourse for enforcement. Successful examples
of ADR systems may be found operating with a variety of legal
foundations. As long as informal dispute resolution is not prohibited
or undermined by the legal system, and as long as some mechanism
for informal enforcement exists if judicial enforcement does not exist,
then informal dispute resolution can work well without support from
the court system. It is possible for an ADR system to operate without
any legal foundation as long as some informal mechanism for
enforcement exists. In general, however, it will be difficult to launch a
successful ADR system when the relationship with the formal dispute
resolution system is ambiguous, and potential users may believe the
results of the ADR system may be overturned or undermined by the
judicial system. 

Example

In Bangladesh, traditional shalish agreements were enforced through

village peer pressure. Agreements were announced and publicly
proclaimed. Families would lose face if they did not comply with
agreements. The reformed village mediation system relies on this
traditional compliance mechanism and succeeds despite the lack of
formal court enforcement. Likewise in the Middle East, traditional village
mediation systems rely upon family honor for enforcement. When a village
elder mediates a dispute, the settlement is agreed between two families
rather than between two individuals. If one party does not comply with the
agreement, the honor of the entire family is discredited.

The voluntary arbitration system of the National Conciliation and Mediation

Board in the Philippines was created in 1986. Prior to 1989, however, the
system attracted few of the many labor-management disputes for which
the system was intended, in part at least because the laws creating the
system did not articulate a clear legal jurisdiction or procedures for the
system. In 1989, legal changes provided clearer legal foundations for the
system, and provided for more active public promotion of the process.

Likewise, in Bolivia, an absence of a legitimizing legal framework inhibited

ADR operations prior to 1997. The new Arbitration and Conciliation Law,
which establishes consistent arbitration and conciliation procedures and
the ability to enforce arbitration awards in the courts, gives potential users
confidence that they will not be wasting their time in ADR. Service
providers also feel more confident marketing their services.

In addition to clarifying any ambiguities in the legal foundations for ADR,

program designers should assess the larger legal environment and work to
remove laws that may negatively impact the use of ADR. In Ukraine, it is
now illegal to negotiate or mediate settlement of a case once it has been
submitted to a court. If the parties wish to settle outside the auspices of
the court, they must withdraw the case and forfeit the filing fee. This legal
construct discourages the mediation and settlement of cases that might
be resolved. 

Other laws may have an indirect impact on ADR organization. Ukrainian

laws forbid NGOs from charging fees for services. Although this law is not
intended to affect ADR specifically, it has had the effect of threatening the
financial sustainability of the Ukraine Mediation Group, which must now
depend on charitable contributions or questionable kick-backs from
mediators who receive direct payment from users. USAID influence can
help create legal foundations for ADR. In Bolivia, the USAID mission linked
its support for judicial reform to the passage of the Arbitration and
Conciliation Law. This linkage created a constituency of support for ADR
and a clear legal foundation for operation and enforcement. 

• 4. Find an effective local partner. 

• Dispute resolution and conflict management projects are more

sensitive to local norms and culture than many other development
projects. When choosing local partners for ADR program design and
implementation, the normal considerations of sustainability, effective
and honest management, and local acceptability are important. 

• In addition, those implementing ADR programs must be carefully

tuned to the political and social culture of the communities in which
they operate. This suggests that a good design should identify a
local organization, NGO, or government department that is well-
managed, financially stable, broadly reflective of the diverse
constituencies in the country or community, and sensitive to the
cultural norms around conflict resolution.


• While filling all of these qualifications may be difficult, the most

important consideration may be the enthusiasm, energy, talent and
commitment of the director and staff, and their sensitivity to and
ability to operate within the local community.

 • 

The USAID mission in Ukraine credits much if the success of the
Ukraine Mediation Group to the enthusiasm and commitment of the
director, as well as his intuitive understanding of the needs and
norms of the society. His leadership has been critical to the growth
and acceptance of the program, despite a culture that has been less
receptive than many others to informal third-party dispute resolution.

What Program Design Considerations Are

Important? – Operations and Implementations
Part I

Operations and Implementations

• 1. Establish effective procedures for selection, training, and

oversight of mediators and arbitrators

• The success of an ADR program depends on the quality and

reputation of the mediators or arbitrators employed by the
system. Selection and training are critical components of program
design. In addition, ADR programs should incorporate safeguards to
ensure mediator and arbitrator impartiality and quality, including
procedures for regular evaluation and oversight.


• 

a. Selection and training 




• he choice and training of mediators and arbitrators are probably the

T
most crucial factors in the success of any ADR program because
their credibility affects the confidence of the users.

• 

A number of considerations affect the credibility of ADR service
providers. 

•
(i) Selection of local notables

Some programs have succeeded because they have chosen highly

respected local citizens to be the mediators. The selection of notables or
village elders bases the credibility of the system on the individual
reputations of the mediators. These local notables may have close
relationships with and influence over disputants in particular cases, and
may use their influence to push for settlements that uphold community
norms. Notables may have little formal training in ADR techniques.
Nevertheless, they may be widely respected and sought out because they
represent and uphold community norms that disputants accept as fair
standards for resolving disputes. 

Example

The Mediation Boards in Sri Lanka are staffed by respected local

volunteers. In China, the Peoples Mediation Committees draw on highly
regarded local citizens as members. Likewise in Taiwan, observers and
participants attribute the success of the mediation committees, in part at
least, to the fact that the mediators are respected residents of the local
villages or towns.

One of the several factors contributing to the decline of the lok adalat
court in India after they were placed under formal government
management in 1988 was the change in the characteristics of the
“conciliators.” Whereas conciliators had been chosen from within the local
community when the lok adalats were operated outside government
control, the conciliators chosen by the government were frequently not
members of the community in which they operated. This led to a decline in
public confidence in the system.

Example

In Bangladesh, the Madaripur Legal Aid Association (MLAA) selects

mediators based on the recommendation of local elders and elected
officials. As noted in MLAA documents, “a mediator worker must be
families with the local/societal roots and belongings of the parties, as well
as their specific traditions, customs, and values. By being locals, the
mediators ensure that they are familiar with all the nuances of local lives,
both of the parties directly involved and others who may be indirectly
concerned with the outcome of the resolution process”.

There may be a trade-off between choosing “notables” and choosing

“progressives” or “representatives of disadvantaged groups” as ADR
providers. Notables may have greater authority to resolve disputes
according to existing norms, but little interest in mitigating power
imbalances between parties in disputes. Progressives (e.g., social workers
or teachers from outside the community) and representatives of
disadvantaged groups (e.g., women, members of low-income or low-
status groups) may have less authority, but greater interest in mitigating
power imbalances.

(ii) Familiarity with the legal system may not be essential

Familiarity with the formal legal system may be another qualification trade-
off. Where the legal systems widely agreed to be byzantine and unjust, it is
not clear that familiarity with it should be a criterion for selecting third
parties, even for court-annexed, labor or commercial disputes that are
mediated or arbitrated in the shadow of the law. 

In the Philippines, labor arbitrators from a private voluntary association,

who are generally less familiar with labor law than the official government
labor arbitrators, appear to be more popular with disputants than the
government labor arbitrators. Some disputants believe that the
government’s arbitrators are more likely to take bribes to manipulate
regulations. On the other hand, training programs in Sri Lanka and
Bangladesh include components designed to inform mediators about
relevant laws. Familiarity with legal standards is considered important by
users. In Bangladesh in particular, users cite the training and familiarity
with relevant laws as one of the advantages of the village mediation
system over tradition shalish. 

(iii) Cultural norms affecting selection and credibility

Cultural norms may influence the criteria for selection of effective and
appropriate mediators. 

Example

In many Asian cultures, the welfare of the whole community is seen as

more important than the rights of individual members. In these cultures,
the most widely respected and accepted mediators may be those who
best promote community interests. Likewise, many Asian cultures focus on
long-term reconciliation as a more important goal than short-term dispute
resolution. Mediators who are more adept at promoting reconciliation will
me more effective. Finally, Asian cultures often place more importance on
credibility rather than neutrality, and highly respected community members
may be more effective mediators, even if they are not completely neutral,
than neutral mediators of lower community share.

(iv) Training as a means of establishing credibility

Some systems have been effective in establishing the credibility of third

parties through effective training. 

The success of IMSSA in South Africa depended on the quality and

intensity of its mediator and arbitrator training program, which contributed
to a favorable reputation for quality and professionalism.

Further, IMSSA trained a large number of mediators, which allowed it to

respond in  a timely manner to requests for services.These factors helped
IMSSA develop an institutional reputation for quality and effectiveness,
and helped contribute to a national reputation for ADR as an effective
means for resolving disputes. 

Example

In many Asian cultures, the welfare of the whole community is seen as

more important than the rights of individual members. In these cultures,
the most widely respected and accepted mediators may be those who
best promote community interests. Likewise, many Asian cultures focus on
long-term reconciliation as a more important goal than short-term dispute
resolution. Mediators who are more adept at promoting reconciliation will
me more effective. Finally, Asian cultures often place more importance on
credibility rather than neutrality, and highly respected community members
may be more effective mediators, even if they are not completely neutral,
than neutral mediators of lower community share.

 • Operations and Implementations


• 1. Establish effective procedures for selection, training, and
oversight of mediators and arbitrators

• b. Maintaining impartiality

• The effectiveness of an ADR system depends not only on the

selection and training of credible mediators or arbitrators, but also on
procedures to maintain their impartiality (and the perception of
impartiality), as well as procedures to monitor and correct poor
performance. Impartiality is a straightforward principle, but one that
allows a wide range of interpretations in practice. 

Example

Third parties in some cultures may take a very strong directive role to push
disputants toward particular outcomes that meet their interests, while third
parties in other cultures would be seen as biased if they advocated for a
particular outcome, even if they agreed on its fairness.

• ome guidelines on impartiality (or non-partisanship) may apply

S
across cultures:

◦ In general, mediators and arbitrators should not favor the

interests of one disputant over others in any dispute.

◦ ADR providers should be required to inform all disputants of

financial or personal relationships with any disputant.

◦ Disputants should agree jointly on the choice of an ADR

provider, or have a veto over that choice.

◦ Salaries or fees for ADR providers should be paid by an

intermediary organization, or shared with some rough quality
(straight or income-adjusted) by all parties to a dispute.

It is not always necessary or appropriate for ADR third parties to recluse

themselves simply because they have ongoing relationships with one or
more of the disputants. Those ongoing relationships (and even the social
pressure that the neutral may bring to bear on some of the parties) may be
critical to their ability to resolve the dispute in a way that satisfies the
parties. Some systems intentionally choose mediators who are likely to
have a relationship with the parties to the disputes. 

Cultural norms may help inform the design of mechanisms for preserving
impartiality. In Bangladesh, village mediation committees are composed of
a minimum of three members for each mediation. Not only does this
comport with the traditions of the region, but the use of a panel of
mediators helps limit systematic corruption or bias. In some countries, the
laws authorizing ADR include provisions designed to prevent conflicts of
interest and bias. 

Example

In Bolivia, the Arbitration and Conciliation Law included criteria for the
disqualification of an arbitrator. These criteria include: economic interest in
the case of financial relationship with one of the parties, defined legal or
blood relationships, known opinions on the dispute that would prejudice
the outcome, and intimate friendship or hostility with one of the parties.

c. Oversight

Most effective systems employ some form of ongoing oversight of ADR

mediators and arbitrators, including observation by case managers,
investigation of complaints from parties, and monitoring of results.

Retaining and re-certification is advisable to maintain ADR third parties’

commitment and ability to remain impartial. The Madaripur Legal Aid
Association (MLAA) in Bangladesh has established a system for
observation of mediations, and of oversight of the mediators by a
“monitoring cell” within the service. This group has a target of 550
monitoring visits each year.

Mediation workers can be terminated if too many complaints are filed

against them, or if the monitoring cell believes they are not functioning
properly.  

What Program Design Considerations Are

Important? – Operations and Implementations
Part II

Operations and Implementations

• 2. Find or create a sustainable source of financial support.

• Several potentially successful ADR systems have been crippled by

lack of sustainable financial support. The financial cost of operating
an ADR system can vary widely. 

• One of the most widely respected systems, the Mediation Boards in

Sri Lanka, operates very inexpensively with volunteer mediators
(although as noted elsewhere, the increasing burdens on these
mediators call into question the long-term viability of the volunteer
system). 


• 

Other systems operate as permanent centers, incurring rent, staff,
and other operational costs. Whatever the cost of the system, the
source of ongoing funding, either government budgetary support or
long-term donor support, should be identified as part of the design
process. 


 • he project design team should consider creative models for

T
financial support.The legal framework for ADR may influence the
financial sustainability of the system. 


• 

In Ukraine, it is illegal for NGOs to charge fees for services. The
Ukraine Mediation Group depends on charitable donations from
donors, membership dues, and contributions from mediators who
recieve direct payment for their services from users. The constraints
of the current legal system threaten the sustainability of the
program. 

Example

In the Philippines, the voluntary arbitration service of the National

Conciliation and Arbitration Board (NCMB) is supported by a Special
Voluntary Arbitration Fund (SVAF), which subsidizes the costs of the
arbitration process for union-management disputes. The Fund receives
registration fees, which employers pay when registering a Collective
Bargaining Agreements with the Ministry of Labor.

• 3. Create an effective outreach and education program to reach

users.

• The success of a system is linked to the level of confidence users

have in the system. This level of confidence can be increased by the
amount of energy focused on education of potential users. In
addition, disadvantaged members of societies are sometimes
effectively denied access to public processes because they are
unaware of their options. Outreach efforts can help increase their
access to dispute resolution programs. 

a. Outreach and education for users

Sometimes, simple publicity campaigns to raise public awareness of the

ADR option is the most important factor for success. In Uruguay and
Argentina, lack of public awareness of court-annexed ADR in the past
seemed to have been a major factor limiting the impact of the system. In
Ecuador, coordinated public relations support from the press and
government was important in establishing four mediation centers between
1993 and 1996. 

Outreach and education efforts may require innovative techniques,

particularly to reach populations with low levels of literacy. In Sri Lanka,
radio and television programs have helped inform and educate the
population about the Mediation Boards and their procedures. Handbills,
community workshops, and union and workplace presentations have also
been used effectively in many countries. When new ADR systems are
based on improvements to existing structures, the information campaign
may need to focus on the changes to those structures under the new
system. The outreach efforts in Bangladesh focused less on notifying
potential users about the service than on informing women about the
changes in the system. 

Extensive outreach and education campaigns may be unnecessary for

grassroots community programs, or for programs focused on particular
sectors of the community where information about the program may
spread by word of mouth. The widespread use of the IMSSA mediation
and arbitration services in South Africa and the use of community justice
centers in local neighborhoods both succeeded without extensive
outreach campaigns. User satisfaction and a positive reputation were
essential for this development.

• b. Education for stakeholders


• 

Even when a system is widely known, and when it fits traditional and
cultural norms, a public relations effort can be important to the
success of the program. In Sri Lanka, the Mediation Boards are quite
widely known by the public. A public education campaign has been
important, however, for winning over the support of community
officials who are critical to the implementation of the program. 


• 

More than 900 stakeholder workshops have been conducted across
Sri Lanka during the past six year with the intent of educating local
magistrates, police chiefs, judges, and village leaders. Winning the
support of village leaders has been important since they are
responsible for both publicizing the Mediation Boards as well as
 encouraging “defendant” parties to attend. They are also important
monitors and enforcers of the agreements. 


• ikewise, education and public relations efforts are aimed at the legal
L
profession in Sri Lanka to encourage their support of the Mediation
Boards. Some lawyers have expressed concern that settlements
have not followed legal precedents or requirements. Education
efforts are now aimed at bringing lawyers into the system to help
inform mediators of legal requirements, and to gain legal community
support for the system. 

• 4. Site ADR programs in convenient locations and create

support services to overcome barriers. 

• Outreach and education may be insufficient to enable disadvantaged

parts of the population to use ADR programs if they are unable to
travel to ADR program sites or cannot effectively use the
programs. Once the initial needs assessment identifies barriers to
usage, program designers should identify ways of overcoming those
barriers. Siting the programs in locations convenient, hospitable, and
accessible for the target population will be important. Many users
may need guidance on their dispute resolution options, including
their legal rights and the steps necessary to ensure them. 

Example

In Bangladesh, the Madaripur Legal Aid Association provides counseling

for disputants to educate them about their legal options, advice regarding
the best use of those options, information about the relationship between
ADR and the court system, and the assistance in preparing themselves for
either mediation or litigation. Although the MLAA was initially established
to provide assistance for users of the formal court system, mediation
services now form the majority of its work. The program continues to
provide legal assistance in the courts for impoverished clients who are
unable to resolve their dispute through mediation. This range of services
and advice improves the real access for disadvantaged users to the full
range of legal options.

Some users may be deterred by conditions unrelated to the design of the

system itself. Program designers should consider whether they need to
implement legal protections for users of the system to prevent such
intimidation.

In 1969, Mexico established the Boards of Arbitration and Conciliation to

help resolve labor disputes. The boards failed for a variety of reasons,
including corruption, lack of enforcement, and the existence of unethical
agents who would skim a large part of any award as compensation for
representation before the boards. The system did provide however, for
workers’ travel costs, the postponement of attorney’s fees until after a
settlement had been reached, and the continuation of employment and
wages during the course of the proceedings. These legal protections were
inadequate to make the system successful, but they were essential to
ensure worker participation in the system. 

Example

Some workers are unable to take time away from work to appear before a
court. Others may face intimidation, loss of wages, or dismissal if they
bring labor-related grievances to the attention of any authority.

• 5. Establish effective procedures for case selection and

management. 

• ADR systems can develop a poor reputation if they attempt to

resolve disputes for which they are not designed or intended.
Effective screening procedures are important to ensure the efficiency
of the system and a reputation for effective case management. Any
ADR system will fail in resolving disputes which do not fit the criteria
for which the system is designed. 

Example

Mediation cannot succeed when the parties to the dispute do not accept
mediation and do not actively participate in the process. Likewise,
facilitated negotiation systems are likely to fail when one party has a
superior level of power or education and can outmaneuver the other party.
Similarly, a dispute in which one party benefits from delay is also unlikely
to be resolved through a process in which participation is voluntary.

A successful program design should develop case selection criteria that

will fit the design and purpose of the process, and ensure that cases which
are not likely to be resolved through the ADR process are referred to the
courts or some other forum.

The Centro de Mediación, in Costa Rica, created clear criteria for

screening cases prior to acceptance. This filter ensured that the mediators
had a reasonable chance of success in the cases that came before them,
and kept out cases that were more suited to a formal legal process. The
careful evaluation of cases prior to acceptance led to a high level of
successful case resolution for the center and a positive reputation among
the target population of disadvantaged and unemployed residents.

• 6. Establish effective procedures for program evaluation. 

• Evidence of program impact is important for building users’

confidence in the system, and for persuading donors to invest in the
system. Program evaluation is also critical for ongoing improvement
of the program. ADR systems are, however, notoriously difficult to
assess and evaluate, even in the United States where data are
relatively available and reliable.


• 

Baseline data are especially important to collect prior to program
implementation. These data should include: the number of cases of
various types processed each year; the target constituencies
involved in each type of case; the average time between case filing
and disposition for a variety of types of cases; the average cost of
litigation; and the users’ perception of fairness of outcome. This data
may be gathered as part of the initial assessment process.


• 

The ADR system itself should establish procedures for collecting and
processing data regarding its operation. This data should include the
same information noted above, as well as any case management
and disposition data necessary to monitor the performance of
individual mediators or arbitrators. Additional information relevant to
specific desired outcomes or development objectives should also be
collected. The program design should include a process for
 reviewing the data on a regular basis. Cultural norms may influence
the design of appropriate evaluation systems.

Example

In Ukraine, the years of authoritarian rule contributed to a closed society

and a general fear of disclosure. The Ukraine Mediation Group has found
that users of mediation services are often reluctant to share information or
data about the mediation process. Efforts to gather data have been
thwarted by a general reluctance to disclose information in surveys or
follow-up calls. In such circumstances, program designers may need to
develop creative alternatives to follow-up surveys.

Lesson Summary

• The key points from this module are the following:

• If ADR appears feasible, program designers should ensure that the

ADR program meets key preparation criteria – needs assessment
and identification of goals, participatory design process, adequate
legal foundation, and effective local partner.


• 

Program designers should also ensure that the ADR program meets
implementation criteria – effective selection, training and supervision
of ADR providers, financial support, outreach, effective case
selection and management, and program evaluation procedures. 


• 

Cultural norms may influence the design of appropriate evaluation
systems.

Module 9 - Taxonomy and Case Studies

Taxonomy and Case Studies - Learning
Outcomes

• On successful completion of this module, you will be able

to: 

◦ Define different ADR models

◦ Describe examples of hybrid ADR models

◦ Explain how various ADR programs were used in different

case studies

◦ Describe how countries were selected for ADR case

studies

Taxonomy in ADR

Introduction

Alternative Dispute Resolution (ADR) includes practices, techniques and

approaches for resolving and managing conflicts short of, or alternative to,
full-scale court process. 

The variety of ADR models found in developed and developing countries

may be described in two fundamental ways: basic ADR processes, which
include negotiation, conciliation, mediation, and arbitration; and hybrid
ADR processes, in which specific elements of the basic processes have
been combined to create a wide variety of ADR methods (e.g., mediation
is combined with arbitration in med-arb.). Hybrid ADR processes may also
incorporate features found in court-based adjudication; for example, the
minitrial mixes an adjudication-like presentation of arguments and proofs
with negotiation.

This taxonomy provides definitions of basic and hybrid ADR methods used
in private, governmental, and court-connected ADR. The definitions reflect
common usage among ADR professionals, the majority of whom are from
developed countries. Wherever possible, an example of a country which
has implemented individual ADR models is indicated, along with a short
citation to a relevant case study or document in the Working Bibliography
for further reference. 

• Background ADR Terms and Concepts


◦ Court-connected ADR: ADR processes that are linked
formally to the governmental justice system; such ADR
activities are authorized, offered, used, referred by, or based in
the court system. Court-based programs and court referrals to
private ADR services are covered by this term. Agreements
arising out of court-connected ADR may be enforceable as
court orders. Court-annexed ADR: ADR programs or practices
authorized and used by the court system.

◦ Facilitation: Refers to a process by which a third-party

neutral helps the parties reach consensus on disputed issues.

◦ Impartiality/Neutrality: When discussing the third party

intervener, impartiality refers to the third party's
disinterestedness in the dispute— s/he has no personal stake
or interest (financial or otherwise) in the situation. On the other
hand, a neutral third party has no inclination one way or
another regarding the dispute or the disputants. It may be said
that finding an impartial third party is easier than finding a
neutral one.

◦ Mandatory/Voluntary: These terms refer to how

disputes enter ADR processes. If the parties are compelled to
use ADR (by the court or statute, for example), then the use is
mandatory. If the use is based wholly on the consent of all the
parties, then it is voluntary.

◦ Non-Binding/Binding: Where the disputants are required

to accept and respect the outcome of the ADR process, such
as third party opinions, that process is binding. ADR outcomes
that are advisory only are a feature of nonbinding processes.
As a rule, disputants are not bound by an outcome or
resolution in ADR, unless they agree to be bound. (There are
exceptional situations of mandatory binding arbitration.)

Basic ADR Models

Negotiation

The most common form of dispute resolution, negotiation is the process

by which the parties voluntarily seek a mutually acceptable agreement to
resolve their common dispute. 

Compared with processes involving third parties, generally negotiation

allows the disputants themselves to control the process and the solution.

Conciliation

A process in which a third party meets with the disputants separately in an

effort to establish mutual understanding of the underlying causes of the
dispute and thereby promote settlement in a friendly, unantagonistic
manner. Often the first step, and at times sufficient, to resolve disputes.

Mediation

A voluntary and informal process in which the disputing parties select a

neutral third party (one or more individuals) to assist them in reaching a
mutually-acceptable settlement. Unlike a judge or arbitrator, the mediator
has no power to impose a solution on the disputants; instead, the
mediator assists them in shaping solutions to meet their interests. The
mediator's role and the mediation process may vary significantly,
depending on the type of dispute and mediator's approach.

Mediators can employ a wide-range of techniques, e.g.: assist parties to

communicate effectively and to develop a cooperative, problem-solving
attitude; identify parties' underlying interests; identify and narrow issues;
transmit messages between parties; explore possible options for
agreement and the consequences of non-settlement.

Arbitration

An adjudicatory dispute resolution process in which one or more

arbitrators issues a judgment on the merits (which may be binding or non-
binding) after an expedited, adversarial hearing, in which each party has
the opportunity to present proofs and arguments. Arbitration is
procedurally less formal than court adjudication; procedural rules and
substantive law may be set by the parties.

Court - Annexed Arbitration

One or more arbitrators, usually lawyers, issue a non-binding judgment on

the merits after an expedited, adversarial hearing. The arbitrator's decision
addresses only the disputed legal issues and applies legal standards.

Either party may reject the non-binding ruling and proceed to trial;
sometimes, cost sanctions may be imposed in the event the appellant
does not improve his/her position in court. This process may be
mandatory or voluntary.

Private Arbitration

Private (v. court-annexed) arbitration may be "administered"— managed—

by private organizations, or "non-administered" and managed by the
parties. 

The decisions of arbitrators in private arbitration may be non-binding or

binding. Binding arbitration decisions typically are enforceable by courts
and not subject to appellate review, except in the cases of fraud or other
defect in the process. 

Often binding arbitration arises from contract clauses providing for final
and binding arbitration as the method for resolving disputes.

Skills

ADR processes may help you and the other people involved to learn new
skills and ideas so that you can prevent future disputes or resolve them
earlier. 

 • Examples of Hybrid ADR Models


• A wide variety of hybrid models have emerged in developed and
developing countries. Below are some examples of hybrids found
connected to courts in commercial and government settings.

Appellate ADR


Appellate court programs use mediation in mandatory, pre-argument
conferences in cases that appear most likely to settle; mediators are
typically staff attorneys or outside lawyers.

Early Neutral Evaluation (ENE)

A court-based ADR process applied to civil cases, ENE brings parties and
their lawyers together early in the pretrial phase to present summaries of
their cases and receive a nonbinding assessment by an experienced,
neutral attorney with expertise in the substance of the dispute, or by a
magistrate judge. The evaluator may also provide case planning guidance
and settlement assistance; in some courts, it is used purely as a
settlement device and resembles evaluative mediation.

Fact - Finding

A process by which a third party renders binding or advisory opinions

regarding facts relevant to a dispute. The third party neutral may be an
expert on technical or legal questions, may be representatives designated
by the parties to work together, or may be appointed by the court.

Judge - Hosted Settlement Conference

In this court-based ADR process, the settlement judge (or magistrate)

presides over a meeting of the parties in an effort to help them reach a
settlement. Judges have played a variety of roles in such conferences,
articulating opinions about the merits of the case, facilitating the trading of
settlement offers, and sometimes acting as a mediator.

Mediation - Arbitration

An example of multi-step ADR, parties agree to mediate their dispute with

the understanding that any issues not settled by mediation will be resolved
by arbitration, using the same individual to act as both mediator and
arbitrator. Having the same individual act in both roles, however, may have
a chilling effect on the parties participating fully in mediation. They might
believe that the arbitrator will not be able to set aside unfavorable
information learned during the previous mediation. Additional related
methods have evolved to address this problem.

In Co-Med-Arb, different individuals serve as neutrals in the arbitration and

mediation sessions, although they both may participate in the parties'
initial exchange of information. In Arb-Med, the neutral first acts as
arbitrator, writing up an award and placing it in a sealed envelope. The
neutral then proceeds to a mediation stage, and if the case is settled in
mediation, the envelope is never opened. 

Minitrial

A voluntary process in which cases are heard by a panel of high-level

principals from the disputing sides with full settlement authority; a neutral
may or may not oversee this stage. First, parties have a summary hearing,
each side presenting the essence of their case. 

Each party thereby can learn the strengths and weaknesses of its own
case, as well as that of the other parties. Second, the panel of party
representatives attempts to resolve the dispute by negotiation. The neutral
presider may offer her opinion about the likely outcome in court.

Court - Based Minitrial

A similar procedure generally reserved for large disputes, in which a judge,

magistrate or nonjudicial neutral presides over a one- or two- day hearing
like that described above. If negotiations fail, the parties proceed to trial.

Negotiated Rule - Making, Regulation Negotiation or Reg - Neg\

Used by governmental agencies as an alternative to the more traditional

approach of issuing regulations after a lengthy notice and comment
period. Instead, "agency officials and affected private parties meet under
the guidance of a neutral facilitator to engage in joint negotiation and
drafting of the rule. 

The public is then asked to comment on the resulting, proposed rule. By

encouraging participation by interested stakeholders, the process makes
use of private parties' perspectives and expertise, and can help avoid
subsequent litigation over the resulting rule." 

Ombudsperson

An informal dispute resolution tool used by organizations. A third party

"Ombudsperson" is appointed by the organization to investigate
complaints within the institution and prevent disputes or facilitate their
resolution. The Ombudsperson may use various ADR mechanisms (e.g.,
fact-finding, mediation) in the process of resolving disputes.

Private Judging

A private or court-connected process in which parties empower a private

individual to hear and issue a binding, principled decision in their
case. The process may be agreed upon by contract between the parties,
or authorized by statute (in which case it is sometimes called "Rent-a-
Judge"). 

Settlement Week

Typically, a court suspends normal trial activity for the week and with the
help of volunteer lawyers, mediates long-pending civil cases. Mediation
sessions may last an hour or two. Unresolved cases go back on the
court's docket.

Summary Jury Trial

A flexible, voluntary or involuntary non-binding process used mainly to

promote settlement in order to avoid protracted jury trials.  After a short
hearing in which the evidence is provided by counsel in abbreviated form
(but usually following fixed procedural rules), the mock jury gives a non-
binding verdict, which may then be used as a basis for subsequent
settlement negotiations.

Bench Trial

Like summary jury trial, except that presiding neutral provides an advisory
opinion.

Two - Track Approach

Used in conjunction with litigation, representatives of disputing parties

who are not involved in the litigation conduct settlement negotiations or
engage in other ADR processes. The ADR track may proceed concurrently
with litigation or during an agreed-upon hiatus in litigation.

• ADR Taxonomy

• Overview of ADR processes
 • Introduction

• While this taxonomy is not a catalogue of traditional or indigenous
dispute resolution methods, an effort has been made to direct
learners to developing world examples in which features of traditional
dispute resolution have been incorporated in ADR.

• 




• 



Following the definitions section is an ADR Chart which provides an
overview of ADR processes. They are organized on a continuum
reflecting the role of a third-party in the process: first, unassisted
negotiation (without third party involvement); second, facilitated
negotiation without advisory opinion (a third party assists the parties
in resolving their dispute, but provides no advisory opinion); third,
facilitated negotiation with advisory opinion (third party does issue a
non-binding, advisory opinion); and fourth, ADR with binding opinion
(third party issues opinion binding the disputing parties).


• 



Another chart, Examples of ADR in Action, lists examples of ADR
programs by type of dispute and ADR provider.

Case Studies

Introduction
• There are five case studies annexed to this Guide. Each case
study examines an ADR program in a developing/transition country.


• 

The five case studies are:

• 


◦ Bangladesh: NGO-supported Community Mediation

◦ Bolivia: Private Mediation and Arbitration of Commercial

Disputes

◦ South Africa: NGO Mediation and Arbitration of Labor

Disputes

◦ Sri Lanka: Government-Supported Community Mediation

◦ Ukraine: NGO Mediation of Civil and Commercial

Disputes

◦
• The cases are designed to:

◦ Give USAID staff concrete examples of ADR in action.

◦ Highlight key issues that USAID staff need to consider

when deciding whether to support an ADR program.

◦ Draw lessons on program design and implementation

strategies from field experience.

• Introduction

• The case studies use the following format:

◦ Key Points: A one-page summary of the case. The Key

Points page briefly describes the ADR program, and highlights
the most important lessons about program goals, design,
operations and impacts.

◦ Program Description: A short description of the ADR

program's origins, goals, design, operation and impact.

◦ Program Analysis: An explanation of key factors that

influenced program goal-setting, design, operation and impact.

◦ Program Assessment: An assessment of the program's

success in meeting its goals, the most important challenges
the program must meet to maintain/increase its impacts, and
steps that program staff might take to meet these challenges.

• Bangladesh Summary

• Bangladesh's court system is unresponsive to the needs of the poor,
and its traditional village dispute resolution institutions are biased
 against the interests of women. Based on a 1995 national customer
needs survey, USAID-Bangladesh defined local participation and
increased access to justice (especially for women) as a strategic
objective, and improved ADR as an intermediate result (IR).


• 

The case profiles a community mediation program developed to meet
USAID's ADR IR. The program is managed by the Maduripur Legal Aid
Association (MLAA), a Bangladeshi NGO. The MLAA community
mediation program uses a multi-tier structure of village mediation
committees supported by MLAA field workers

to deliver ADR services. 


• 

Local mediators are selected, trained and supervised by MLAA field
workers in consultation with local officials, religious, and social
leaders. The local committees meet twice a month to mediate village
disputes, free of charge. Most disputes involve property or marital
problems. Agreements are voluntary and are not enforceable in court.
The MLAA program currently mediates roughly 5000 disputes annually
and resolves roughly two-thirds of them. Satisfaction with the program
is high. 


• 

Most users prefer the program both to the traditional village dispute
resolution system and to the courts.

• Bolivia Summary

• Since the 1980s, USAID/Bolivia has pursued reform of the justice
system to support both antinarcotics and democratization objectives.
In 1990, USAID began to support the use of ADR, especially
commercial arbitration and conciliation, as a way to reduce the
backlog of cases in the court system. By reducing the backlog, ADR
could support both anti-narcotics and broader judicial reform
objectives.


• 

This case study profiles the development and operation of the
 commercial arbitration and conciliation program. USAID’s
implementing partners, the Inter-American Bar Foundation (IABF) and
the Bolivian Chamber of Commerce, established Conciliation and
Arbitration Centers within the chambers of commerce in Bolivia’s three
major cities. 


• 

Starting in 1994, the centers recruited and trained conciliators and
arbitrators from the business community, provided education and
outreach to potential users of their services, and helped draft a new
Arbitration and Conciliation Law to make conciliation agreements and
arbitration decisions enforceable by the courts. The centers provide
both conciliation (an opportunity for disputants to reach a voluntary
agreement with the help of a neutral party, the equivalent to mediation
in the U.S.), and arbitration (a binding decision by a panel of three
arbitrators with expertise on the disputed issues). 


• 

Users pay a fee based on the monetary value of the dispute; the fees
are supposed to cover operating costs. The demand for their services
is still small: the La Paz Center, the largest of the three centers, has
conciliated 10–25 cases annually since 1994, and arbitrated 1–8 cases
a year, with a high resolution rate and high levels of compliance and
user satisfaction. 


• 

The major obstacle to increased use of commercial ADR seems to be
the business community’s low level of awareness and understanding
of ADR.

• South Africa Summary


• This case profiles the ADR work of an NGO, the Independent
Mediation Services of South Africa (IMSSA), in the mediation and
arbitration of labor disputes. The program works to resolve union
management disputes, primarily in the organized labor sector. 

• 

Participation in the ADR processes is voluntary, and arbitration
agreements are legally enforceable. Mediated agreements are not
enforceable, but are reported to enjoy a high compliance rate.
Panelists are well-trained, and they may collect fees for their work. 


• 

IMSSA finances its ADR work through a mix of fee-for-service (about
20%) and donor funding. Its caseload has grown from 44 cases in
1984 to almost 1500 in 1996. Cases can be handled within a few days.
There is no systematic follow-up or monitoring, although satisfaction
appears to be high.

• Sri Lanka Summary


• This case profiles Sri Lanka's community mediation program, which
dates to 1990. The Sri Lankan program operates in all but the
Northern and Eastern provinces, which are affected by civil war. It
includes 218 mediation boards, with 5,400 trained mediators, and has
handled about half a million cases since 1990. The program is based
on a comprehensive Mediation Boards Act of 1988 (amended in 1997),
and operates within a clear legal framework. 



The mediation boards are appointed and operate at the community
level, with immediate oversight by commissioners and general
oversight by the National Mediation Boards Commission.Cases
appropriate for mediation include civil disputes and minor criminal
offenses; certain kinds of cases in fact need certificates of non-
settlement from the mediation boards before they may be heard in
court. 



Mediations are free to users; program costs are covered by the Sri
Lankan government, with some funding from foundations. The
mediation boards meet about once a week for approximately four to
eight hours, using public buildings. Each mediation board is
comprised of a chair and 12-30 mediators; individual panels for cases
have three mediators. Satisfaction with the program is high.

• Ukraine Summary

• As Ukraine emerges from the Soviet system and attempts to
privatize, build civil society, and move to reform its justice system, a
well-functioning ADR system may help further these goals. 


• 

USAID is supporting an NGO, the Ukraine Mediation Group (UMG), in
its work mediating commercial disputes as well as a broad range of
civil disputes, consistent with strategic objectives aimed at legal and
economic reform and increased democratic participation. USAID
recently began to support the UMG, which had previously secured
funding through grants from other foundations and organizations. 


• 

This case profiles the UMG's mediation program, which is essentially a
network of mediation organizations now in four cities: Donetsk (the
first), Lugansk, Odessa, and a new office in Kiev. 


• 

UMG trains mediators, offers a clearinghouse for those seeking
mediation (matching mediators with clients), and consults with
enterprises. Although commercial and labor disputes, as well as
disputes related to privatization, will eventually be the target of UMG
efforts, UMG will take any type of civil case.

Mediators in the network are trained and certified by the UMG. 


• 

The program is still relatively small: from January 1996 to March 1997,
the three active offices accepted a total of 61 applications for
mediation, and 26 were actually mediated.

• Methodology and Bibliography


• Methodology:


• 

As directed by the USAID work order, this ADR Guide was developed
 using information from several sources. The three primary sources of
information were: existing studies on the use of ADR, field research in
five developing countries, and guidance from ADR experts and USAID
staff.


• 

Bibliography:


• 

The working bibliography was generated from an extensive review of
literature on ADR from developing and developed countries.


Lesson Summary
• The key points from this module are the following:

• Alternative Dispute Resolution (ADR) includes practices,

techniques and approaches for resolving and managing conflicts
short of, or alternative to, full-scale court process. 

• 


• 

There are a number of different ways ADR programs can be
designed to cater to the needs of different situations.


• 

The variety of ADR models found in developed and developing
countries may be described in two fundamental ways: basic ADR
processes, which include negotiation, conciliation, mediation, and
arbitration; and hybrid ADR processes, in which specific elements of
the basic processes have been combined to create a wide variety of
ADR methods.