Articles
Resolving Disputes for your Business
"A new approach"
Disputes in business are now common place and can make or break your business depending on how you handle them. Most disputes inevitably have significant time and cost implications, the consequences of which can determine the future of many businesses.
As a result of this, parties to a dispute, are leaning towards Alternative Dispute Resolution (ADR) rather than going through the strenuous and often stressful Courts System.
Business Disputes are unfortunately in some cases unavoidable. Both parties to the dispute may have a legitimate cause for the dispute which will require the opinion of a neutral and expert third party. ADR can provide a means of resolution, which can have many advantages over the traditional Courts System. There are many means of resolving disputes in your business.
The most common are: -
1. Litigation
Every citizen has a constitutional right to litigate his/her dispute before the Courts. Litigation in Ireland is adversarial which means that each side presents its case and the Judge decides on the evidence and submissions so presented according to the Law without conducting any enquiry or investigation independent of the parties. While clearly certain disputes can only be resolved by litigation the purpose of this article is to show that there are alternatives to litigation which are more cost efficient and make more business sense.
2. Arbitration
Arbitration involves the private resolution of a dispute through a decision of a mutual third party. In theory at least, Arbitration can be much more efficient and speedier than litigation as there should be no back log or build up of cases. There is no appeal to the Courts in respect of an Arbitrators findings except for very restricted rights to set aside the award in very limited circumstances. Arbitration is governed by relatively recent legislation, namely, the Arbitration Act, 2010 which governs arbitrations which commenced after the 8th June 2010.
3. Mediation and Conciliation
Conciliation and Mediation are alternatives to Arbitration and Litigation and are generally what are referred to as Alternative Dispute Resolutions or ADRs. It is clear that this method of conflict resolution will be used far more extensively in the years ahead and the Courts System would actively encourage ADR as a method of resolving Commercial Disputes. It differs from Litigation and Arbitration in that the disputes are resolved or settled, if at all, by mutual agreement of the parties with the assistance of a neutral third party rather than by the decision of a third party Arbitrator or Judge. A conciliator or mediator can, and invariably will, engage in private and separate communications with each of the parties to help them explore the strength and weaknesses of their positions, and more importantly, their needs, with a view to helping them identify possible alternative solutions. The freedom to focus on the parties needs is a characteristic strength of conciliation and mediation and the key very often to their success, because it leads to the prospect of each side coming away from the process satisfied with the settlement because it meets their needs in some way and because they have to input in constructing it.
The emphasis of the process is on settlement. Such solutions are clearly more attractive to business people because of the potential they offer for a commercial solution and equally importantly because they tend to preserve good business relationships. The basis of a good commercial settlement to a dispute is to have the feeling that there is something in the settlement for both parties and in most cases mediation and conciliation will offer this.
Alternative methods of resolution, particularly litigation, tend to polarise the parties and emphasise their differences.
In that case the parties tend to lose control of the outcome as there will invariably be a winner and a loser and therefore the prospect of a commercial solution and the preservation of good business relationships is diminished. On the other hand, mediation and conciliation, due to the fact that both parties are active and willing participants in the settlement, can often lead to the disputing parties being able to recommence their commercial relationship. Another advantage of Mediation and Conciliation is that they prevent the necessity of companies having to reveal commercially sensitive information in public, which can happen if the matter proceeds to litigation.
It should be noted that there is a distinction between Mediation and Conciliation, which is that a mediator typically does not make recommendations in the event that the parties fail to resolve their dispute, while a conciliator is typically empowered to do so but it is important to note that a conciliator is not empowered to impose a proposal on the parties.
To summarise, Conciliation and Mediation will generally cost less and be quicker than Arbitration or Litigation and it is clear that in the years ahead this method of Dispute Resolution will be used particularly where commercial disputes are involved.
Contact: David J. Sweeney
Partner - Alternative Dispute Resolution
Sweeney McGann Solicitors
Phone: 061 317533
E-mail: dsweeney@sweeneymcgann.com |
