Principal distinctions between litigation and negotiation, mediation, and arbitration
According to Goldberg, Sander, Rogers & Cole, legal agreements are necessary in business, and decisions about how conflicts and disputes should be resolved when necessary must be made (2014). The first step in resolving a dispute is negotiation, which entails the parties to the conflict meeting up to talk through their differences and find a way to resolve the situation. They carry out this independently, with the firms (or people) involved in the process having complete control. When bargaining is unsuccessful, the parties will turn to mediation, which involves hiring or bringing a third party to a neutral location where each can give their side of the story. In arbitration, a third party (arbitrator) is used out of court and he decides the outcome and what to be done due to a conflict. In litigation or a lawsuit the parties in a conflict presents their case to a judge or a jury with the aim of reaching a settlement or a resolution.
Figure 1.1 Negotiation, Mediation, Arbitration and Litigation
Conflict resolution Methods
- Negotiation
- Litigation
- Arbitration
- Mediation
Advantages
- Parties do create their own processes, proceedings are confidential, proper behavior is compelled due to formality, arbitrator may be selected on the basis of knowledge and understanding
Advantages
- Flexibility of parties, confidentiality by avoiding publicity, least expensive, high degree of party control, high degree of satisfaction and submission to agreement
Disadvantages
- Legal precedents are not produced, can be used as a stalling tactic, negotiation may imply lack of reaching an agreement, parties involved may not be compelled to continue with negotiations and mediation, lack of pertinent parties weakens the final agreement.
Disadvantages
- Costly and takes time, the right of appeal may be limited, the success is dependent on the third party, the outcome may be uncertain in binding arbitration.
Adopted from Goldberg, S. B., Sander, F. E., Rogers, N. H., & Cole, S. R. (2014). Dispute resolution: Negotiation, mediation and other processes. Wolters Kluwer Law & Business.
Negotiation would be used when a dispute is a minor one and where the resolution can simply be reached by the two parties in a conflict. Mediation is involved when negotiations have failed and the parties need to reach a compromise. On the other hand, arbitration and litigation may be used when a resolution can be easily achieved by the two parties. It is usually brought in where mediation cannot solve the conflict between the parties involved as pointed out by Goldberg et.al., (2014).
References
Goldberg, S. B., Sander, F. E., Rogers, N. H., & Cole, S. R. (2014). Dispute resolution: Negotiation, mediation and other processes. Wolters Kluwer Law & Business.
