Dispute Prevention and Early Dispute Resolution Framework

This is the final part of a three-part series on litigation interest and risk assessment (LIRA) and early dispute resolution procedures.  The first part explains how lawyers can use LIRA procedures to help clients make better decisions about litigation and negotiation.  The second part describes some early dispute resolution procedures, which can benefit from good LIRAs.

This part integrates these ideas in a coherent framework including dispute prevention.

Obviously, preventing disputes is even better than handling them soon after they arise.  In a piece in the Theory-of-Change Symposium, Noah Hanft, the former President and CEO of CPR, describes how businesses can plan to prevent disputes when they are negotiating transactions involving continuing relationships.  Rather than merely adding boilerplate dispute resolution clauses at the end of negotiations, he advocates planning for business collaboration throughout the negotiation.  He also recommends use of standing or stand-by neutrals to help resolve problems during performance of agreement.

After businesses negotiate agreements involving continuing relationships, they may use a “partnering” procedure that “reorients adversarial goals to a set of mutual goals, establishes more open communication, establishes methods to address disputes and creates a collaborative atmosphere to reap economic benefits, improve working relationships, and prevent litigation.  Although partnering has had its greatest success in the construction industry within the United States, the process is applicable to any business relationship in a joint project or program.  It promotes an environment for sharing risk, encouraging teamwork, addressing issues in a timely manner, and attaining common goals.  It forges together quality management concepts with team-building, collaborative problem solving, and selection of intelligent dispute management and resolution processes.”

Techniques for prevention of business disputes and early intervention can be considered in an upstream-downstream continuum.  Consider the following processes, starting upstream:

Dispute Prevention

  • Planned early dispute resolution – systematic planning for handling a series of disputes, including plans to prevent disputes when possible
  • Transactional negotiation infusing collaboration and dispute prevention throughout negotiation of projects that involve continuing relationships
  • Partnering – developing relationships between principals in projects that involve continuing relationships

Early Dispute Resolution

  • Litigation interest and risk assessment – early and periodic case assessment to help clients make good decisions throughout a dispute
  • Lawyering with planned early negotiation (including settlement counsel) – building good relationships with clients and the other side to lay the groundwork for efficient and reasonable negotiation
  • Pre-suit mediation – using mediators to resolve disputes before litigation escalates conflict and dramatically increases costs
  • Planned early two-stage (and multi-stage) mediation – resolving disputes rationally and efficiently by arranging for sufficient time to investigate and consider issues and interests

Conclusion

There is a suite of processes to help businesses build collaborative relationships, prevent disputes, and manage disputes wisely after they arise.  The program about LIRA at CPR’s annual meeting, as well other programs at the meeting and CPR’s activities, highlights how lawyers, neutrals, businesses, and other parties can create better ways to manage conflict.

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