4 - disputes

• Disputes --> When one person or party makes a claim or demand on another person or party, and that claim is rejected
• BATNAs are usually linked in a dispute situation
• 4 Ways to resolve a dispute include:​

  1. Work out a solution by themselves​
  2. Use an outside party​
  3. Impose a solution based on power​
  4. Dropping the claim​
• Parties in conflict use one of three frames:

  1. interests
  2. rights
  3. power
• Interests: people talk about their positions but often what is at stake is their underlying interests
• Rights:  people may be concerned about who is right – that is, who has legitimacy, who is correct, and what is fair
• Power:  people may wish to resolve a conflict on the basis of who is stronger
• • The more power someone uses against a party, the more that party will use power of their own​
  • The more someone uses interest against a party, the more likely that the other party will hear the interests out​
  • Resolving disputes based on interests will be less costly than using rights or power
• Some important implications in the use of power in negotiations:​

  1. Could bring a quick settlement if threat is real and credible​
  2. Most useful when negotiations have broken down or need to be restarted​
  3. Success depends on how it is implemented (has to be specific and credible, and has to target other party’s high priority interests)​
• Four criteria for analysis​ in which approach you should use in disputes:

  • Transaction costs​
  • Satisfaction with outcomes​
  • Effect on the relationship​
  • Likelihood of Recurrence​
• A third party is someone who isn’t directly involved in the dispute or negotiation, but who can help in resolving it
• ADR (Alternative Dispute Resolution) --> third-party approaches to resolving disputes (in Canada, ADR is a prerequisite before full litigation in some jurisdictions)​
• Warning signs that a third-party might be appropriate:​

  • The emotional level between the parties is high​
  • Communication between the parties is poor or has completely broken down, or the parties appear to be talking “past” each other​
  • Behaviour is negative (such as name calling)​
  • The parties strongly disagree about what information is necessary, available, or required​
  • Differences in interests appear to be irreconcilable​
  • Negotiations have broken down and there is a dead end
• An arbitrator is a third-party who takes control of shaping and determining an outcome 
• 2 types of arbitration:

  1. traditional arbitration
  2. final offer arbitration
• • Traditional arbitration​ --> Each side presents their case and the arbitrator makes a final decision
• Final offer arbitration​:

  • The arbitrator must choose one of the proposals put forth by a disputant​
  • Tends to produce less extreme positions when cases are being presented 
• major advantages to arbitration:

  • The negotiation or dispute ends with a final solution​
  • The solution is usually binding, meaning that parties usually cannot choose whether to follow solution or not​
  • The solution is often seen as credible because arbitrators tend to be perceived as wise, fair, and impartial​
  • The costs of prolonging the dispute are avoided
• major disadvantages to arbitration:

  • By putting control over the outcome in another person’s hands, each party takes a risk that the solution is one that they can live with​
  • Parties may not like the outcome and issues may remain outstanding​
  • In comparison to mediation, there is less commitment to an arbitrator's decision. When parties feel less committed to a decision, they will be less likely to implement it or be more resentful and so the resolution may not be permanent
• A mediator is a third-party who works towards helping disputing parties create a solution themselves by facilitating communication and dispute resolution techniques amongst the parties
• A mediator’s opening statement includes:​

  • An explanation of the mediator’s role​
  • An explanation of the parties role (to work with the mediator to develop an acceptable settlement) ​
  • Some expectations about process, such as whether or not the parties will remain in the same room and ​
  • Some expectations about ground rules, including things like interruptions and whether the settlement is binding.​
• Mediation is more often successful under the following circumstances​:

  • The level of conflict is moderate and not excessively high​
  • The positions of the parties are understood by both parties​
  • Both parties are motivated to settle​
  • The issues do not involve a basic conflict of values, and​
  • The level of power is relatively equal between the parties or the power differential is appreciated by both parties.​
• 2 hybrid approaches:

  1. med-arb
  2. arb-med
• Med-Arb​:

  • First, the parties attempt traditional mediation. ​
  • If unsuccessful, the mediator will act as an arbitrator and make a binding decision on the parties after the parties have made their final submissions
• Arb-Med​:

  • The arbitrator holds a hearing, but does not disclose their findings/decision​
  • The parties then attempt mediation​
  • If unsuccessful, the arbitrator will disclose the binding outcome ​
• Inquisitorial intervention --> most common; high control over the process and final outcome (ideas are presented and third party creates a solution)
• Mediational intervention --> high control over process but not outcome (guidance)
• Adversarial intervention --> high control over outcome but not process (passive listening)
• Provision of impetus --> low control over process and no control on final outcome. (solution from third party is provided only if they cannot resolve issues on their own)
• Differences between two-party and multiparty negotiations:​

  1. Number of parties (and negotiations are bigger)​

  • Exchange should be more open if one party has higher status​

  1. Informational and computational complexity ​
  2. Social complexity​
  3. Procedural complexity (with turns to speak)​
  4. Strategic complexity (can't keep track of everyone's behaviour)​