How do the relative advantages of mediation and arbitration, create a synergy in a combined strategy of MED-ARB?
Abstract: It is obvious to all who work in the alternative dispute resolution (ADR) field that the most important federal statute — the Federal Arbitration Act (FAA) — does not define its key term: “arbitration.” A recent case, Advanced Bodycare v Thione, invited the 11th Circuit to explore which types of ADR processes are considered “arbitration” for purpose of the FAA. Under the 11th Circuit’s narrow test, an agreement to mediate, as well as an agreement to mediate or arbitrate, falls outside of the scope of the FAA. There is a fundamental distinction between an ADR agreement that allows parties to either mediate or arbitrate disputes, and a classic med-arb agreement, which calls for mediation as a condition precedent to binding arbitration. While a med-arb agreement was not before the 11th Circuit in Thione, the authors caution against applying that court’s reasoning to med-arb agreements..
After carefully reading through the background materials, and this article, please answer (in about 3 pages), the following question:
1. How do the relative advantages of mediation and arbitration, create a synergy in a combined strategy of MED-ARB?
2. Point out the advantages of each method, then
3. Focus on how when combined they create synergy.
4. Do not summarize the article, but input your insight as to the concepts of each method and their combination.
Use the below and attached resources to answer questions and others may also be used.
References
Peterson, R. M., & Lucas, G. H. (2001). Expanding the antecedent component of the traditional business negotiation model: Pre-negotiation literature review and planning-preparation propositions. Journal of Marketing Theory and Practice; Statesboro; Fall 2001
Trident University
NCM 50
1
Foundations of Conflict Resolution Management
Module 3
1
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Negotiation Strategies & Procedures
Introduction to Negotiation
Bargaining or Positional Negotiations
Distributive Bargaining
Preparations for Negotiation
“At the Negotiating Table”
Collaboration and Principled Negotiations
Introduction
Principle I – Separate the People from the Problem
Principle II – Focus on Interests, not Positions
Principle III – Generate Options for Mutual Gain
Principle IV – Insist on Using Objective Criteria
Principle V– Know your BATNA
3
Introduction to Negotiation –
Why Negotiate?
Fulfillment of needs.
Scarcity of resources.
The introduction of Trade by Bartering and Monetary means.
No Dependency – No Trade.
The terms and conditions of our transaction, will be determined by negotiation.
4
Introduction to Negotiation –
Why Negotiate?
“Nobody ever saw a dog make a fair and deliberate exchange of one bone for another with another dog…“. Adam Smith (1776)
Negotiating is a human activity, enjoying and suffering, the full range and extent of human behaviors.
5
Introduction to Negotiation –
Why Negotiate?
How to approach conflict? What strategy to adopt?
Negotiation is but one of the options.
If negotiation is chosen,we are exploring: Whether there is common ground, and whether we can find acceptable terms, that can enable a transaction between the two sides.
6
Bargaining or Positional Negotiations
Distributive Bargaining
Preparations for Negotiation
“At the Negotiating Table”
7
Distributive Bargaining
A known a priori price vs. An unknown and To-Be determined price
Entering Price (EP) – The first and beginning price offered or requested.
Leaving Price (LP) – The final price offered or requested. If this price cannot or will not be met, we will “leave the table”.
Distributing the Difference.
8
Distributive Bargaining
9
Distributive Bargaining
10
Distributive Bargaining
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Distributive Bargaining
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Distributive Bargaining
Questions
What are the factors that influence our decision in deciding our EP?
Should we be the first to disclose and present our EP to the other side – make the first offer?
How do we know where we are on the continuum, when we do not know the other side’s LP?
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Distributive Bargaining – cont.
Answers
Answers are not definitive.
The opening offer, is rarely the closing offer:
EP>LP for the seller
EP
Text Book
(Under Construction)
© Dr. Mickey Shachar (2011)
Table of Content
Part I – Foundations of Conflict Resolution Management (CRM)
Chapter One – Introduction to and Overview of CRM………..……………………………..
2
Chapter Two – Sources of Conflict…………………………………………………………………….13
Chapter Three – Conflict Management Approaches & Human Behaviors……….
21
Chapter Four – Negotiation Strategies and Procedures………………………………….
3
1
Chapter Five – Third Party and ADR Methods ………………………………………………..
4
9
Part II – Negotiations
Chapter Six – Bargaining I ……………………………………………………………………
5
8
Chapter Seven – Bargaining II – “At the Table” ……………………………………………
6
5
Chapter Eight – Negotiation Styles and Communication ………………………………
7
0
Chapter Nine – Collaborative or Principled Negotiation ………………………………..
76
Part III – Alternative Dispute Resolution (ADR)
Chapter Ten – Mediation – Foundations ………………………………………………………….
8
4
Chapter Eleven – Mediation – Practicum ………………………………………………………..
9
0
Chapter Twelve – Arbitration – Foundations ………………………………………………….103
Chapter Thirteen – Arbitration – Practicum …………………………………………………..112
Appendixes
Appendix A – The Air Traffic Controllers’ (PATCO) Strike …………………………….121
Appendix B – The People vs. Government – Economic Strife – Argentina ….123
Appendix C – Non-Homogenous Societies – “Quebec – A Distinct Society” ..125
Appendix D – International Conflict – India and Pakistan …………………………….129
Appendix E – International Conflict – Yugoslavia ………………………………………….131
Appendix F – The Alternative Resolution Act (ADRA)
19
96 ………………………….135
Part I – Foundations of Conflict Resolution Management (CRM)
Chapter One – Introduction to and Overview of CRM
1. What is Conflict? – Definitions:
1.1. From the Encarta Dictionary (2002):
• War: a continued struggle or battle, especially open warfare between
opposing forces
• Difference: a disagreement or clash between ideas, principles, or
people
• Differ: to be incompatible, in opposition, or in disagreement
• Mental struggle: a psychological state resulting from the often
unconscious opposition between simultaneous but incompatible
desires, needs, drives, or impulses
• Islamic Management Net (2002) – Conflict is the intentional or
perceived interference of one individual or group in the goal
achievement efforts of another individual or group.
1.2. A compilation of various scholarly definitions1:
Coser 1956 – Social conflict is a struggle between opponents over
values and claims to scarce status, power and
resources.
Schelling 1960 – Conflicts that are strategic are essentially bargaining
situations in which the ability of one participant to gain his ends is
dependent on the choices or decisions that the other participant will
make.
Deutsch 1973 – A conflict exists whenever incompatible activities occur
… one party is interfering, disrupting, obstructing, or in some other
way making another party’s actions less effective.
Wall 1985 – Conflict is a process in which two or more parties attempt
to frustrate the other’s goal attainment . . . the factors underlying
conflict are threefold: interdependence, differences in goals, and
differences in perceptions.
2
Pruitt and Rubin 1986 – Conflict means perceived divergence of
interest, or a belief that the parties’ current aspirations cannot be
achieved simultaneously.
Conrad 1990 – Conflicts are communicative interactions among people
who are interdependent and who perceive that their interests are
incompatible, inconsistent, or in tension.
Tjosvold & van de Vliert 1994 – Conflict–incompatible activities–
occurs within cooperative as well as competitive contexts . . . conflict
parties’ can hold cooperative or competitive goals.
Folger, Poole & Stutman 1997 – Conflict is the interaction of
interdependent people who perceive incompatible goals and
interference from each other in achieving those goals.
2. Types of Conflict
2.1. Types – You are likely to come across two types of conflicts in the workplace
and almost in any other setting. The first conflict deals with the decisions, ideas,
directions, and actions. This is called “substantive conflict”. It deals with
disagreements about issues. The second form, “personalized conflict” is often
identified as personality conflict. In this case, the two parties simply do not like
each other.
2.2. Substantive Conflict – Substantive conflict occurs when two parties
disagree about an issue. Handled in the right manner, the parties in conflict can
create a resolution or outcome, that is better than either party’s original position. In
this case it is most beneficial if the two parties in conflict work together to find a
common solution that will suit both
interests.
2.3. Personalized Conflict – While substantive conflict can be very productive
and beneficial if handled in the right manner, personalized conflict is seldom a good
thing. Personalized conflict is motivated primarily by emotion (usually anger and
frustration), and perceptions about someone else’s personality, character and
motives. When conflict is extremely personalized each party is suspect as a person.
Furthermore, because personalized conflict concentrates on emotion and not issues,
problem solving seldom works, because neither party is really interested in solving
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a problem. In fact, whether it is imagined or real, in extreme cases parties go out of
their way to create new ones! Finally, personalized conflict often worsens over time
unless it is converted to a substantive conflict. This happens because each party
already has a negative view about the other party and has preconceived notions.
Therefore each party expects problems, looks for them, finds them, and this creates
more anger.
2.4. Identification – When involved in a conflict it is important to identify
whether the conflict centers on a substantive conflict or a personalized one.
Although it is not always easy to tell them apart, it is important to “honestly” check
yourself, if you are not approaching this conflict, with a personal stance in mind.
• Asking yourself the following questions will help you distinguish
between the two conflicts: (a) Do I dislike the other person or get
frustrated with him/her? (b) Do I see the other person as
untrustworthy, and undeserving of respect? (c) Is my emotional
reaction to the conflict appropriate to its seriousness? (d) Is my
purpose just to “win”?
• If you answer positive to any of these questions, you may be in for a
personalized conflict that neither party can win in the long-term.
• One good indicator of a personalized conflict situation is that the other
party will try to counter the substantive point on the issue with
different, irrelevant reasons, as to why you are wrong. Usually these
reasons don’t focus on the substantive problem but is an indirect way
to counter with your substantive point.
2.5. Content vs. Relationship – you may also find, that conflicts are
characterized by their two major components: First – the content of the conflict —
the specific issue being argued. Second – the relationship between you and the
other person.
The same problem gets a different reaction and response, when we need to
confront different people. Be it: an employee of ours, a fellow worker, or
someone in a supervisory position. One would think, that the closer the
relations between the parties: husband and wife or two close business
partners, the more considerate and mindful they will be, to preserve this
4
relationship. But we may find that these are the “noisiest” confrontations, as
the close relationship just fuels up the emotional aspects.
In organizations or any other social hierarchy, the relationship issue many
times comes hand in hand with the content one. It is not only the “who is
right” question at stake, but there is an undercurrent consideration of status,
or who gets to say the final decisive word.
3. Sources of Conflict
3.1. Conflict is an integral part of our lives. It may surface wherever and
whenever there are two (or more): people, groups or teams, organizations, ethnic
groups and nations. As each one of the aforementioned, has its own: different
wants and needs, a different set of cultural background, different personal
attributes and behaviors, and to top it all, a different understanding and perception
of the world and its issues.
3.2. We encounter these differences, in our daily personal and professional life,
where we experience abundant opportunities for conflict: From the breakfast table
to the bedroom, from the office water cooler to the board conference room, a
hundred little things each day can lead to discord, and for a variety of reasons,
most of which are
natural and unavoidable.
3.3. The Organization and Conflict – It is a rare organization that does not
come to face conflict, as the workplace by definition has conflict inherent to its
design and hierarchy structure: a top-down authority system; we are required to
work (not always “fun”); we are subject to an evaluation of performance and
conduct; a compensation system (wages and benefits); and the constant threat of
termination.
3.4. There are many ways to characterize the various sources of conflict. We
have chosen to present them within the following categories: Inter-Personal; Intra
and Inter-Organizations; the National and International levels.
3.4.1. Inter – Personal Conflicts
• We are motivated by our: Needs, Wants and Beliefs. Whenever
two people interact, there is bound to be agreement and
disagreement between them, as no two people are alike in their
thinking and
conceptions.
5
• Conflict surfaces from almost every possible interaction between
two or more people.
• Once we understand that certain resources, benefits and
privileges, are limited in their distribution, we enter into a
competitive race to attain
it.
• The quest for power and dominance, has paved a long and painful
road, throughout history and in all societies and cultures.
Furthermore, once power has been achieved, retaining it and
keeping it secure, has brought suppression and oppression to
millions.
• Mankind has yet to accept, that people are different in their beliefs
and color. Bigotry, racism, religious persecution, ethnic
classification, all have been very deep sources of human conflict, in
all countries and continuously throughout history.
3.4.2. Intra Organizations
• Conflict will refer to situations that occur when two or more people
working within the same organization perceive differences in
beliefs, values, or goals which impact their ability to work together
and/or affect the work environment.
• Intra organizational conflicts mostly result over issues such as
performance standards, task completion, policy interpretation, or
interpersonal differences.
• The main areas and sources where conflicts occur: Conflicts in
Interpersonal Relations; Allocation and Reallocation of Resources,
as no one wants to feel as if they were served the short end of the
stick; Perceived “bad or unjust”: planning, scheduling and
workload; Change – people want stability, and seek stability. There
is
nothing like a major change, in any form of the “normal”
workplace environment, to bring upon a resistance to this change.
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3.4.3. Inter Organizations
• Conflicts between organizations are most likely to stem from
competition. From simple “turf wars” to conflict arising from an
attempt to get a larger slice of the market, at the expense of the
other parties in the industry.
• In most cases, an attempt to seize your competitors’ Supply &
Distribution sources and lines, or their tangible or intangible
assets, will most likely be regarded as a “Casus Belli”.
3.4.4. National Level Conflicts
• When we elevate our point of view to the national level, we can
generalize that most conflicts result from three major situations:
• First – a local issue or conflict, that has escalated in its scope, or
has succeeded in convincing a large number of people to support
it. Or a Management-Union conflict, where management is the
government.
• Second – a wide spread disagreement of the people to some
decision laid down by government or any other authority. In most
cases, it will revolve over economic and trade issues: direct and
indirect taxation, regulation or deregulation of goods and services,
dramatic and steep monetary changes like devaluation of currency
or interest rates. Opposition to this varies from a peaceful
democratic demonstration and petition, to open clashes with the
authority, based of course on the political and social culture in that
country.
• Third – social issues and diversity. Societies are not homogenous
entities. They comprise of different Ethnic and racial groups, social
division by class, or any differing minority within a non-accepting
majority.
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3.4.5. Inter-National Conflicts
• In the international arena, we will find that the same underlying
reasons for conflict presented in the previous sections, prevail. The
major difference being the magnitude of the problem, and the
usage of military power as a continuation of verbal politics.
• Furthermore, the complexity of the conflict is enhanced due to the
multi-faceted aspects pertaining to it: religion, ethnicity,
nationalities, minorities and majorities.
• In many cases, where the conflicts are long standing (some going
back many years and centuries), the resolving of the conflict
requires the intervention of a third party.
4. Why Deal with Conflict?
4.1.1. Conflicts do not disappear or fade away, if we close our eyes to them.
The Ostrich approach of “hiding the head in the sand” does not make the situation
better, on the contrary. A conflict is a manifestation of a problem, and if left
unattended, the problem will continue to fester.
4.1.2. All Conflict prevention activities (conflict prevention, conflict resolution,
conflict management, preventive action etc.), aim to mitigate the negative
consequences of conflict.
4.1.3. But first and foremost, if we defined conflict as having a negative
affect on goal attainment, than we need to come up with the most appropriate
answer, that will enable us to “get back to business”, resume our activities and the
pursuit of our personal and/or organizational
objectives.
4.1.4. Conflict (within an organizational context) Can Be Costly. Unmanaged
and unresolved conflict is costly to all involved. It can range from just “losing
sleep”, to finding ourselves in a full scale costly vicious circle. Here are some of the
ways conflict can be expensive for your organization:
• Wasted Time – Conflict wastes the time of anyone who is involved
in the situation. In a survey of managers2, they assessed that they
spend between
30
% and
45
% of their time dealing with conflicts.
The implication is that managers could be utilizing the time spent
in dealing with conflicts to maximize the company’s productivity.
8
• Reduces Decision Quality – Conflict causes people to distort
information to their best advantage. This often is the case in
personalized conflicts where parties are locked in a power or
personal struggle that contaminate the objective information
needed for clear decision-making.
• Loss of Skilled Employees – It is estimated that generally,
50
percent of all voluntary departures vs.
90
percent of all involuntary
departures are due to conflict. The cost of replacing an employee
includes recruiting costs, application and interviewing, and
training.
• Restructuring Due to Conflict – Restructuring the operations in
order to separate conflicting
parties.
• Damage to Property – A direct correlation exists between conflict
and lost, stolen or damaged property. This may be due to poor
motivation or morale where employees do not have interest in safe
keeping or protecting the property of their conflicting party.
• Lowered Job Motivation – Employees are less motivated to be
productive due to poor atmosphere or tension.
5. Conflict Management Strategies and Styles
5.1. “Everybody talks about the weather, but no-one does anything about it”. I
am sure that Mark Twain would not have said the same regarding conflict! We must
do something about it, and decide upon a course of action, that addresses this
conflict.
5.2. Note: conflict isn’t necessarily something to be avoided; in fact, it can prove
highly productive. Conflict signals the presence of diverse points of view, which in
struggle or reconciliation can spark creativity, nourish growth, jump-start
productivity, and strengthen
relationships.
5.3. Styles:
5.3.1. Most people have developed their own personal manner or style, of
reacting in conflict situations, based on character and lifelong experience. On the
personal level, we have a propensity of responding quite “automatically”, somewhat
like a
“conditioned response”.
9
5.3.2. As mangers in an organization, we will see that the issues become
more complex and important, and the consequences are wide spread. Thus, we
cannot allow ourselves the luxury of these “spontaneous styles”, and need to
assess the situation and prepare a conscious and rational plan, to deal with this
situation, or in other words: choose a conflict management strategy. So, whenever
we are faced with conflict, we will attempt at first, to gain control of the situation so
it can be dealt with rationally and objectively.
5.3.3. “Depending on the nature of the conflict, the stage the conflict is in,
and
whether the objective is to escalate, de-escalate, or idle the conflict, different
strategies have varying degrees of utility. Selecting the most effective strategy is
the science of conflict management; applying it skillfully is the art.
5.3.4. To sum it up: A conflict style is a reflexive, habitual way of responding
to conflict, whereas a strategy is an action (or series of actions) consciously chosen
for its ability to achieve a desired result.3
5.4. Strategies: The following section, introduces us to the various conflict
management strategies.
5.4.1. Unilateral Methods
• Avoidance (lose-lose) – We can avoid the issue and walk away.
To quote the English, when your answer to the question: “what
purpose will it serve?” is “none”, then you should consider
abandoning the stage altogether. A less permanent solution is to
decide to tactically avoid or postpone our confrontation and dealing
with the issues.
• Accommodate (lose-win)- you may decide from a strategic or
tactical angle, to give-in to the other side’s demands, and waive
your own
• Competitive (win-lose) – I attempt to bring the solution to
coincide with my version or my opinion. Forcing and imposing a
solution, saves time in the short run, but one must remember, that
a strong, forceful and coercive approach, will always negative
residual effects, that will surface again, should the two sides ever
meet again.
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5.4.2. Bilateral Methods
• The two sides have decided to meet and attempt to solve their
differences. They understand that a unilateral approach is
inadequate and/or not suitable.
• There are two approaches associated with bilateral methods: (a)
Positional Negotiation or Bargaining, and (b) Collaborative or
Principled Negotiation.
• Positional Negotiation or Bargaining. In positional bargaining,
we have both sides attempting to move the outcome, as close as
possible to their own solution. In essence, they are distributing the
range between their two positions, whereas each side is
attempting to maximize their own benefits, on the expense of the
other side.
• Collaborative or Principled Negotiation4 [4] (win/win) –
This is where, the two sides, are not searching to optimize their
personal gains, but to optimize their mutual gains. The sides are
partners in negotiations, and not adversaries. This method is most
beneficial, when the relations between the parties are of
importance and should be retained. Collaboration in essence, is all
about working together to resolve the conflict.
5.4.3. Third Party and ADR Methods
• If the parties cannot (or will not), be able to resolve their
differences, by the unilateral or bilateral methods, but still wish to
do so, outside the Legal Courts of the land, they may utilize the
good services of a third party, or seek Alternative Dispute
Resolution (ADR) options.
• ADR, as used today, refers to an array of dispute resolution
processes that are alternatives to traditional court litigation and
trial by judge or jury. The two most popular forms are arbitration
and mediation.
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6. At the End of the Day – Decide
6.1. Where have we been? After defining conflict, understanding the sources
underlying conflict, and the damage a conflict situation can create, we can see that
we are in need of a conflict management plan.
6.2. What options do we have? Once the core issue of the problem is identified,
we will need to assess which strategic approach would best serve our interests, be
it: a Unilateral, Bilateral or ADR approach.
6.3. Where are we going? We will delve (in the following chapters), more deeply
into the various strategic conflict resolution approaches and their mechanics, so as
to be better informed of their benefits and suitability.
6.4. Once this is completed, we will make our decision and choice, and prepare
ourselves to its practical implementation.
1 Professor Gregg Walker, Oregon State University
2 Noll (2000). Peacemaking , cost of conflict. www.manageconflict.com
3 Schilling, Dianne: Into the Fray: Strategies for Managing Everyday Conflict. Womens
Media’s Conflict Resolution Series – Part 1
4 Principled Negotiation – is the well-known name given to this approach by Fisher
& Ury in their book: “Getting to Yes”.
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http://www.manageconflict.com/
Chapter Two – Sources of Conflict
Note: Focus and emphasis are given to the business and organizational field.
1.
Introduction
1.1. Conflict is an integral part of our lives. It may surface wherever and
whenever there are two (or more): people, groups or teams, organizations, ethnic
groups and nations. As each one of the aforementioned, has its own: different
wants and needs, a different set of cultural background, different personal
attributes and behaviors, and to top it all, a different understanding and perception
of the world and its issues.
1.2. We encounter these differences, in our daily personal and professional life,
where we experience abundant opportunities for conflict: From the breakfast table
to the bedroom, from the water cooler to the conference room, a hundred little
things each day can lead to discord, and for a variety of reasons, most of which are
natural and unavoidable.
1.3. There are many ways to characterize the various sources of conflict. We
have chosen to present them within the following categories: Inter-Personal; Intra
and Inter-Organizations; the National and International levels.
2. Inter-Personal Conflicts
2.1. Since the dawning of mankind, we have been motivated by our: Needs,
Wants and Beliefs. Whenever two people interact, there is bound to be agreement
and disagreement between them, as no two people are alike in their thinking and
conceptions.
2.2. The necessity to live in coexistence has required the development of
common accepted rules to which all should adhere, in order to live peacefully with
one an
other.
2.3. When we talk about conflict within the personal and behavioral scope, we
tend to define it in terms of: anger, harsh words, threat, hurt feelings, damaged
relationships, etc.
2.4. If we look at our daily life and environment, we will see that conflict surfaces
from almost every possible interaction between two or more people. Children
13
fighting over a toy; Parents vs. children (when attempting to discipline them);
husband and wife on all family and household decisions (money management
topping the list).
2.5. Once we understand that certain resources, benefits and privileges, are
limited in their distribution, we enter into a competitive race to get it: siblings
squabbling over an inheritance; males in pursuit of the opposite sex; shepherds
fighting over water sources for their herds and cowboys for grazing pastures for
their cattle; the main point being, the wish to seize and/or control these limited
resources.
2.6. The quest for power and dominance, has laid a long trail of suffering for
those standing in the way. Furthermore, once power has been achieved, retaining it
and keeping it secure, has brought many powerful rulers to suppress and oppress
their subjects or followers, and thus laying the foundations for extreme retaliatory
measures.
2.7. Last but not least, we have yet to accept, that not only are people of
different opinions and concepts, they are different in their beliefs and color. Bigotry,
racism, religious persecution, ethnic classification, all have been very deep sources
of human conflict, in all countries and continuously throughout history.
2.8. It is most important to note:
• These personal conflicts, once they gather momentum, and begin to
rally additional people to side up with either side, escalate into group
conflicts on all levels: team; workplace; tribal and all the way up to
the national level!
• The truly destructive conflicts are those in which the real underlying
issue is of a personal nature. The only true purpose is to cause and
bring harm to someone physically, psychologically or both. It is
obvious, that this serves no other purpose, and these are the types of
conflicts that benefit no one.
14
3. The Organization and Conflict
3.1. General
• It is a rare organization that does not come to face conflict. We live
with the possibility of conflict everyday. To be quite honest, the
workplace by definition has conflict inherent to its design. In general:
• We have a hierarchy – someone on the top giving orders to someone
lower on the ladder.
• Surprising as it may seem, we need to work, and not always is it
“whistle a happy tune” all day long.
• We are evaluated and compensated based on our performance
(needless to say, we will never accept an evaluation lower than what
we evaluate ourselves, or agree that we are paid our true worth).
• We are constantly rubbing shoulders with our co-workers, often with
limited privacy.
• And to top it all there is a constant threat that we may lose our
livelihood due to internal or external factors, not all of which are
within our control.
• Given all of this, we must be aware of these factors and the way they
affect the people and the organization.
• From the managerial point of view, an inability to resolve disputes
effectively or prevent serious conflicts can be counterproductive,
cause disruption in the workplace or lead to litigation.
• So, many organizations have provided for conflict resolution
measures, be it an integrative system or a simple “open door” policy
for employees to present their grievances. Whatever the form, they all
attempt to steer the ship back to its productive course.
15
3.2. Intra Organizations
3.2.1. Definition of Terms:
• Conflict will refer to situations that occur when two or more people
working within the same organization perceive differences in
beliefs, values, or goals which impact their ability to work together
and/or affect the work environment.
• Intra organizational conflicts may result over issues such as
performance standards, task completion, policy interpretation, or
interpersonal differences.
• Informal conflicts may occur among coworkers, employees and
supervisors, within or between groups, and among departments
within an organization. Such conflicts often occur when there are
differences in values, beliefs, or opinions regarding how work gets
completed, how resources or tasks are distributed, or where
priorities should he.
• Formal conflicts, on the other hand, occur when there is an alleged
human rights or policy violation.
3.2.2. Main Areas and sources Where Conflicts Occur
• Conflicts occur in many areas and arise from many sources. We
will shine a light on the most common and/or having a significant
impact on the organization. It should be noted, that many conflicts
are a derivative of many causes and can spread out and engulf
many areas.
• Conflicts in Interpersonal Relations – Conflicts in interpersonal
relationships occur on an individual basis. This may be between an
employee and the boss, two co-workers. Sometimes conflicts that
exist on this level may not be explicit or overt. There may be a
conflict between you and another party that you are not aware of.
You need to be aware of some signs that may signal there are
existing conflicts.
• Conflicts in Meetings – all organizations have meetings of some
sort. From top-level board and management, discussing the
16
company’s goals and objectives, to the mailroom employees
planning their summer vacation shifts. These meetings are
perceived many times, as a forum and platform for many, to
present themselves and their opinions in front of their superiors or
peers. Disregard, disrespect, and ridicule of one’s presentation in
any meeting, will always be regarded as a personal matter, and
will have negative consequences. When conflicts occur during
meetings it could become very disruptive, and they cause a
diversion to non-productive matters.
• Conflicts in Negotiations – when negotiating with clients, vendors,
or even employees, it is vital to keep in mind that both parties are
seeking to benefit, Most conflicts at this level occur because one
party feels like they have been taken advantage of.
• Allocation and Reallocation of Resources – when the CEO presents
a new direction for the company, or a new objective or standard to
meet, it is always accompanied by a new allocation of company
resources and restructuring. When Department A is reduced in
size, or its budget is cut significantly, you have laid a strong cause
for dissent and conflict.
• Perceived “bad”: planning, scheduling and workload. Many
unhappy employees will point out, that their workplace is not well
organized. No one enjoys being told that his work is expected and
due ”yesterday”. No one likes to change his planned annual
vacation, because something “expected” came up. And worst of
all, when there is an unfair distribution of the workload between
and within the same group of employees.
• Change – people want stability, and seek stability. It gives them a
sense of security, and reduces fear of the unknown. There is
nothing like a major change, in any form of the “normal”
workplace environment, to bring upon a resistance to this change.
• The industrial revolution caused millions of workers to strike, and
confront the change with blind fury. Workers in France threw their
17
wooden shoes (sabots) at the machines causing damage (and
consequently, introduced the new term of “sabotage”, whereas
their English counterpart Ned Ludd destroyed new machinery and
was honored with the “Luddite” term).
• But we need not go so far back or to such extreme changes. Even
a minor change of working hours, a new policy on the company’s
dress code, or change in the management culture or style, can
cause a small discomfort and discontent to develop into a full-
fledged conflict.
3.3. Inter Organizations
3.3.1. Conflicts between organizations are most likely to stem from
competition:
• Supply & Distribution sources and lines – Most companies operate
between their suppliers and their customers. Any attempt of one
company to influence or manipulate and obviously to “steal”
suppliers or customers, from their original relationships, will result
in a fierce competitive, and if need be, legal battle.
• Assets – Manufacturing companies, have their copyrights and
patent protected products and designs. They develop new
programs, unique plans or any other intangible asset.
Furthermore, they invest in human capital, by training and
development. Again, any perceived infringement of these assets,
will immediately be confronted by a legal suit.
3.4. National Level Conflicts
When we elevate our point of view to the national level, we can generalize that
most conflicts result from three major situations:
3.4.1. First – a local issue or conflict, that has escalated in its scope, or has
succeeded in convincing a large number of people to support it. Or a
Management-Union conflict, where management is the government.
3.4.2. Second – a wide spread disagreement of the people to some decision
laid down by government or any other authority. In most cases, it will
revolve over economic and trade issues: direct and indirect taxation,
18
regulation or deregulation of goods and services, dramatic and steep
monetary changes like devaluation of currency or interest rates.
Opposition to this varies from a peaceful democratic demonstration and
petition, to open clashes with the authority, based of course on the
political and social culture in that country.
3.4.3. Third – social issues and diversity. Societies are not homogenous
entities. They comprise of different Ethnic and racial groups, social
division by class, or any differing minority within a non-accepting
majority.
3.4.4. We will try to provide a representing example for each of these
situations.
• The Air Traffic Controllers’ (PATCO) Strike (see Appendix A).
• The People vs. Government – Economic Strife – Argentina
(see Appendix B).
•
Non-Homogenous Societies – “Quebec – A Distinct Society”
(see Appendix C).
3.5. Inter-National Conflicts
3.5.1. When we enter the international arena, we will find that the same
underlying reasons for conflict presented in the previous sections,
prevail. The major difference, being the magnitude of the problem, and
the usage of military power as a continuation of verbal politics.
3.5.2. What we will see also, is that there are multi faceted aspects to the
conflict: religion, ethnic groups, nationalities, minorities and majorities.
3.5.3. When all the sources mentioned above, are long standing (some going
back many years and centuries), the resolving of the conflict requires
much more than a simple personal or organizational dispute, although
the measures and methods are similar.
3.5.4. Please have this in mind when reading through the following
international conflicts presented.
19
3.5.5. Important Note: our intent is to present the sources of conflict in the
international arena. We will do so in the most academic and neutral
manner, and attempt to present only the factual points, without any
personal bias or partiality.
International Conflict – India and Pakistan (see Appendix D).
International Conflict – Yugoslavia (see Appendix E).
4. Cultural Diversity – in ALL of the above
4.1. The Encarta Dictionary defines diversity
as:
• Variety: a variety of something such as opinion, color, or style.
• Social inclusiveness: ethnic variety, as well as socioeconomic
and gender variety, in a group, society, or institution
4.2. To our already complicated world, we now add the final attribute
pertaining to conflict – diversity. This issue, at times, underlies a conflict, or
hovers over it like a dark cloud. Race, ethnicity, gender, are quite obvious
examples of the diversification factors and forces, but there are also the
conceptual and cultural differences between people.
4.3. The following is a good insight as to the concept of cultural conflict
[1]: “Almost all people believe that their way of thinking about and doing
things is the best way…Unless they have had mediated experiences with
everyday life in other common cultures, they seldom become aware of the
roots or uniqueness of their own and other people’s realities…since most
adults’ subjective cultures are relatively stable and internally coherent, it is
difficult for them to understand fully others whose meanings are inconsistent
with their mindset”
4.4. Only openness and tolerance are the true answer to a conflict
revolving over diversity. Unfortunately, these are long time social processes.
20
Chapter Three – Conflict Management Approaches & Human Behaviors
1. Conflict Styles & Strategies – Introduction (a short reminder)
Most people have developed their own personal manner or style, of reacting
in conflict situations, based on character and lifelong experience. On the personal
level, we have a propensity of responding quite “automatically”, somewhat like a
“conditioned response”.
As mangers in an organization, we will see that the issues become more
complex and important, and the consequences are wide spread. Thus, we cannot
allow ourselves the luxury of these “spontaneous styles”, and need to assess the
situation and prepare a conscious and rational plan, to deal with this situation, or in
other words: choose a conflict management strategy.
So, whenever we are faced with conflict, we will attempt at first, to gain
control of the situation so it can be dealt with rationally and objectively.
“Depending on the nature of the conflict, the stage the conflict is in, and
whether the objective is to escalate, de-escalate, or idle the conflict, different
strategies have varying degrees of utility. Selecting the most effective strategy is
the science of conflict management; applying it skillfully is the art.
To sum it up: A conflict style is a reflexive, habitual way of responding to
conflict, whereas a strategy is an action (or series of actions) consciously chosen for
its ability to achieve a desired result. .1[1]
The following section, introduces us to the various Conflict Management
Strategies, while the last section deals with Personal Styles & Face-to-Face
Communication
1[1] Schilling, Dianne: Into the Fray: Strategies for Managing Everyday Conflict.
WomensMedia’s Conflict Resolution Series – Part 1
21
2. Approaches and Methods that Deal with Conflict
2.1 Unilateral Methods
2.1.1 – Avoidance (lose-lose) – We can avoid the issue and walk away. It
may be that you find it unimportant, or that you have limited or no power to
influence the situation. To quote the English, when your answer to the
question: “what purpose will it serve?” is “none”, then you should consider
abandoning the stage altogether.
A less permanent solution is to decide to tactically avoid or postpone our
confrontation and dealing with the issues, due to the need to: Distance
ourselves from the problem and people; To review the issues with a “cool
head” and a new perspective; Or if we believe we are in need of a
preparation phase. The time gained, should be used wisely to reorganize our
resources, to better deal with the problem, at a later date.
Should you decide on postponing the discussion, do so in collaboration with
your counterpart. Always leave the door open, and establish an agreed time
and place for the next meeting.
Note: one should remember that, adopting the Scarlet O’Hara approach of:
“I’ll think about it tomorrow”, allows for the other side to reorganize too, and
that for the time being, the conflict problem remains unattended.
2.1.2 – Accommodate (lose-win) – you may decide from a strategic or
tactical angle, to give-in to the other side’s demands, and waive your own (I
guess this is commonly known as the “married man’s best practiced option”).
A more serious example: In World War II, Sweden, was deeply concerned
about possible German aggression (especially after the occupation of
Denmark and Norway, and Finland’s entry into the war on the side of the
Axis). So when on 18 June 1940, German Foreign Minister Ribbentrop
informed the Swedish Minister in Berlin – Germany, that if Sweden resists the
German use of Swedish railways to transport troops and supplies against
Norway, it would have dire consequences. The Swedish Government,
debated the German demand, and assessed the overall geopolitical and
22
strategic aspects and consequences of this demand. After a hard and long
night of discussions, the Swedes decided to accommodate!
2.1.3 – Competitive (win-lose) – I attempt to bring the solution to
coincide with my version or my opinion. I may choose this approach, if I feel
that I have the advantage and/or power, to persuade or coerce the other
side to accept my terms, without conceding to their demands.
This is an effective strategy when time is of the essence, and a swift
resolution is required, or when the issue is relatively unimportant.
You may often hear the usage of the following lines: “I am the
Boss/Daddy/Commander/Instructor, and therefore you do what I say!”
Forcing and imposing a solution, saves time in the short run, but one must
remember, that a strong, forceful and coercive approach, always leaves the other
side, with a bad feeling, a feeling that will be remembered, should the two sides
ever meet again.
2.2 – Bilateral Methods
The two sides have decided to meet and attempt to solve their differences.
They understand that a unilateral approach is inadequate and/or not suitable. What
ever the reason, they have made a “big step” towards understanding, that the
solution lies “somewhere in-between”, their respective initial positions, and that
they will need to compromise their stance, in order to move from TWO solutions, to
an agreed ONE.
If a compromised approach is taken, and an agreed solution is to be found, it
ultimately brings us to a win-win
outcome.
There are two approaches associated with bilateral methods: (a) Positional
Negotiation or Bargaining, and (b) Collaborative or Principled Negotiation.
2.2.1 – Positional Negotiation or Bargaining. In positional bargaining, we
have both sides attempting to move the outcome, as close as possible to
their own solution. They will employ all their powers and assets, and use
23
different tactics (and “dirty tricks” if necessary), to reach this desired
outcome.
In essence, they are distributing the range between their two positions,
whereas each side is attempting to maximize their own benefits, on the
expense of the other side.
This is a middle-of-the-road strategy that gets everyone talking about the
issues and moves you closer to each other and to a resolution. In
compromise, each person has something to give and something to take.
Compromise is most effective when issues are complex and power balanced.
Compromise can be chosen when other methods have failed and when both
you and your opponent are looking for middle ground, willing to exchange
concessions. It almost always means giving up something in order to attain
part of what you want.
Compromise works best when both sides are “right,” but simply have
different values or opinions. It doesn’t work well at all when one side is
clearly wrong. 2[2]
2.2.2 – Collaborative or Principled Negotiation 3[3] (win/win) – if
working towards a compromised solution via bargaining, was a “big step”,
than deciding to collaborate, is a “giant leap”.
This is where, the two sides, are not searching to optimize their personal
gains, but to optimize their mutual gains. The sides are partners in
negotiations, and not adversaries. This method is most beneficial, when the
relations between the parties are of importance and should be retained.
Collaboration in essence, is all about working together to resolve the conflict.
It will require the gathering, integrating and sharing of data and information. Both
sides should be able and willing to contribute time, energy and resources to finding
2[2] Shilling, D. “Conflict management, Conflict resolution”
3[3] Principled Negotiation – is the well-known name given to this approach by Fisher & Ury in their book: “Getting
to Yes”.
24
and implementing a solution. This requires trust. And the more cooperative and
involved the parties get in the process, the more their mutual trust grows.
2.3 – Third Party and ADR Methods
If the parties cannot (or will not), be able to resolve their differences, by the
unilateral or bilateral methods, but still wish to do so, outside of the Legal Courts of
the land, they may utilize the good services of a third party, or seek alternative
dispute resolution (ADR) options.
ADR, as used today4[4], refers to an array of dispute resolution processes
that are alternatives to traditional court litigation and trial by judge or jury. The two
most popular forms are arbitration and mediation. Other models include processes
like: mini-trial; early neutral evaluation; moderated settlement conference;
mediation-arbitration (med-arb); neutral fact-finding, “rent-a-judge”; and summary
jury trial.
There are many cases, when the conflict, cannot be resolved by the
disputants themselves. A few examples: there is a big difference in the power
balance, or the personal skills of the two sides, creating a disadvantage to one of
them; distinct differences of culture and language; very high-wired emotional and
behavioral manifestations not allowing for any focus on the issues; what ever you
do, your
counterpart is not responsive or not cooperating with you directly.
It must be clear, that step one, is the willingness of the parties to these
proceedings, their agreement on the choice of the person doing the intervention (be
it a skillful communicator or a professional mediator), and their acceptance of the
“rules of the game”.
2.3.1 – Mediation – the two sides agree to accept a neutral third party, who
will serve as a mediator between them. The proceedings are very informal,
the mediator has no decision powers, and the two sides are not obligated in
any form to any outcome. In essence, the mediator is there to facilitate a
better communication and understanding between the two sides. The
4[4] Netzley, M. (2001). Alternative dispute resolution: A business (and) communication strategy
Business Communication Quarterly; New York; Dec 2001;
25
neutral’s role involves assisting parties, privately and collectively, to identify
the issues in dispute and to develop proposals to resolve the disputes. The
mediator may meet privately and hold confidential and separate discussions
with the parties to a dispute (sometimes called caucus).
2.3.2 – Arbitration – both sides agree to present their respective cases, to
an agreed neutral arbitrator for a decision. The parties agree in advance that
the decision (award) of the neutral is to be final. If the two sides cannot
reach an agreed solution, the arbitrator has the authority to pass judgment
and render a binding solution.
2.3.3 – Other Forms of ADR. 5[5] Some jurisdictions and courts require
early neutral evaluation. Under early neutral evaluation, parties to litigation
are required to make presentations to a neutral evaluator. The evaluator is
engaged to provide both parties with an assessment of the strengths and
weaknesses of their respective positions, and to facilitate disputes. Courts in
some jurisdictions may have case management conferences at which time
staff counsel or other court officers may take active roles in promoting
settlement discussions.
3. – Personal Styles & Face-to-Face Communication
How do we react to Conflict? As seen above, we have quite a number of
options when dealing with conflict. In most cases, we will choose rationally between
them, based on the perceived evaluation, as to which one will better serve our
desired
outcome.
But some of us may adopt a conflict “style”, when reacting to different
conflict situations or to the people we are in
dispute.
People differ in their behaviors and styles. Some people are “pushy” and
domineering, while others are more quiet and relaxed in nature. Some make the
most of seeking peaceful resolutions, while others create and jump readily into the
fray.
5[5] Barnes, G., Downs, R. & Downs, M. (2002). Introduction to Alternative Dispute Resolution. Hieros Gamos.
http://www.hg.org/adrintro2.html
26
http://www.hg.org/adrintro2.html
What are the factors that affect the way disputants behave? Is it only their
character? Or is it also a tactical decision to adopt a certain
style?
In order to answer these questions, we will break this section into three
parts: (1) Personal Styles; (2) Face to Face Communication; and (3) Competitive
vs. Cooperative Approaches.
3.1 – Part I – Personal Styles
Some people are outgoing, easy to make conversation, and make decisions
based on “gut feelings”. Others are in need of carefully analyzed data, before they
make their move.
Knowing your counterpart’s style, will help you to understand who he is, and
how to better communicate with him.
Susan Onaitis in her book: Negotiate Like The Big Guys 6[6], Determines
that: “
Most researchers agree that there are a few basic styles that come from the
combinations of verbal preference and comfort level with showing emotions in
giving and receiving information”. And divides them into 4 category styles:
Datacrats; Goalies; Relators; Expressors.
3.1.1 Datacrats – Are very organized people, dependant on the written
word, and base their decisions on the gathering and analyzing of facts and
figures. They will usually work within specific guidelines, and carefully and
meticulously take notes of the procedures. As they are very organized, they
do not tend to skip basic steps, or “jump to the last page”, before they are
ready. Careful attention to details, and solution oriented.
3.1.2 Goalies – Having an outcome or result orientation, these people are
always pushing themselves and others to a “fast track” pace. They will
6[6] Negotiate Like The Big Guys . by Onaitis, Susan. Published by Silver Lake Pub. 1999. available from Net
Library.
27
http://www.netlibrary.com/ebook_info.asp?product_id=5913
http://www.netlibrary.com/ebook_info.asp?product_id=5913
generally do a lot of talking (less on the listening), mainly due to their belief
that they hold (all) the answers. Emotions are not normally shown, as we
have a “job-at-hand-that- needs-
to-be-finished” practical approach.
3.1.3 Relators – Establishing good relations, is paramount to this style.
They are attentive and good listeners, and are not rushed for time. It is
important for them to create and maintain good teamwork relations, a
pleasant discussion atmosphere, and avoid any destructive behavior, that
may lead to conflict.
3.1.4 Expressors – These are the people who do not maintain “a poker
face”. They are open, friendly and outgoing. Many times, they will attempt to
capture and place themselves center stage. They may be easy to read, but
they are still creative and innovative.
Note – One must remember, that although these may be characteristic
attributes, people may adopt a certain style or mix of styles, dependant on their
feelings and assessment of which style best fits the issue and parties involved.
3.2 – Part II – Face to Face Communication
Unless we decide to avoid our problem, all other approaches (some more and
some less), require communication between the
two sides.
When we communicate, we exchange messages with the other side. But we
should be well aware, that the message sent and the message received, are not
always the same.
Face-to-face communication, can be divided into three forms and skills:
• Verbal messages
• Nonverbal messages
• Listening
28
Note – these skills are not mutually exclusive or stand alone, we all have
developed our own personal combination of them all, synthesized together into a
Communication style.
• Verbal messages – although this is our primary tool of
communicating, what we say and how we say it, are many times
not accepted verbatim and are open to misunderstanding. Our
choice of words and tone of voice, as the usage of idioms and
expressions, may become a communicating bridge, or create a
rift.
• Nonverbal messages – We communicate and send information
by: eye contact, raising an eyebrow in surprise, smiling,
frowning, and the way we fidget on the chair.
• We have seen people use physical demonstrations, to catch the
attention of those present, from hand movements and gestures,
to removing a shoe and banging it on the speaker’s podium! It
is the keen observer that will see these messages, and interpret
them correctly and usefully.
• Listening – throughout the whole process of interpersonal
interaction, we are continuously, gathering information, to be
analyzed and evaluated, so as to better our understanding of
the situation, and bettering our stance. Listening is the most
important tool, for achieving these objectives. You will observe
many times, that some people “grab the microphone”, and
dominate the meeting with continuous rhetoric. Forgetting that
the other side has an opinion too, and should be given the
chance to present it.
29
3.3 – Part III – Competitive vs. Cooperative Approaches
We asked: What are the factors that affect the way negotiators behave? Is it
only their character? Or is it also a tactical decision to adopt a certain style?
In addition to the aforementioned factors, I would like to add an additional
insight pertaining to the two opposing sides’ behaviors.
If it is not an “I say – You do” situation, we are dependant on the decisions
and actions of the other side. If we present an offer, will they accept or reject? If
we are willing to concede on a certain issue, will they reciprocate, or become
greedy, and demand more? Should we show a willingness to cooperate? And if we
do how should we respond, if they do not?
Many observations and studies, have been conducted, as to the factors
leading the two sides to adopt a competitive or cooperative approach. And it was
found, that the more dependent and the higher the level and closeness of the
relations between the two sides, the more likely they will cooperate.
Example: Management and the Workers’ Union. These two bodies, will have
their discussions and disputes, at times clashing and at times negotiating. But their
ongoing relationship, is a strong factor to ensure
cooperation.
Furthermore, if one side decides to adopt a certain style, it will lead the other
side to reciprocate this behavior, by
behaving in the same manner.
Competitiveness begets competitiveness, and cooperation begets
cooperation.
Breaking the issue into sub-issues, may reduce the probability of resorting to
a competitive approach, as we are creating smaller “stakes” (thus reducing the
risks), and enhancing the development of “trust building” blocks, on the road to full
cooperation.
30
Chapter Four – Negotiation Strategies and Procedures
Introduction to Negotiation
As presented in the previous chapter, Negotiating is but one of an array of
conflict management options, open before us, when we encounter conflict. It is not
a one time choice, but a timely decision, based and dependent upon: the specific
situation; the nature of the conflict; the sides/parties and the relations between
them; time constraints; the stakes; etc.
Negotiation is all about; TWO sides having their own respective solutions to a
conflict or to the differences between them, and their attempt to reach ONE agreed
solution, breaching on the way, human behaviors and substantial factors, that
separate the two sides.
Where there is no dependency, there is no negotiation. Only when I have
“something” that is of a perceived value to the other side, and I wish to exchange it
for “something” of theirs, that is of value to me, will we have created the base for a
probable trading, by way of negotiating.
Why Negotiate?
Mankind has always faced the grim reality that resources were scarce. As no
one enjoyed the full range of worldly delights, on their own accord, Trade was
introduced. Bartering at first: my oranges in exchange to your coal, my physical
labor in your fields in exchange for a hot meal and bed, etc. when monetary means
became common, a value or worth was affixed to each commodity, and the trading
process was made easier.
The scarcity of resources; the need to fulfill ones basic wants and needs; the
need to valuate tangible and intangible commodities; all have been instrumental in
the formulation of negotiating techniques and methods.
It must be made clear, that if I have no need of your services or goods, or
vice versa, there will be no trade between us. But when I need your wheat to make
my bread, and you need my coal to keep you warm, a state of dependency has
been established, and what remains to be agreed upon, are the terms and
conditions of our transaction.
31
Dependency of needs, and determining the terms of our exchange, are the
foundations of negotiations in general and bargaining in particular.
An observation made by Adam Smith in his 1776 book “An Inquiry into the
Nature and Causes of the Wealth of Nations” sheds an interesting light on our
negotiation topic: “Nobody ever saw a dog make a fair and deliberate exchange of
one bone for another with another dog“. The point being, that negotiating is a
human and only human activity, enjoying and suffering, the full range and extent of
human behaviors.
We will choose to negotiate (from the various conflict management
approaches), if we believe that this approach will create the best result or outcome
for us.
We have chosen, of our own free will to explore this option, and we are free
at any time, to decide if we wish to accept or reject any proposal or suggested
solution. What we are in fact exploring, is whether there is common ground, and
whether we can find acceptable terms, that can enable a transaction between the
two sides.
In this module we will delve into the mechanics of:
• Part I – Bargaining or Positional Negotiations
• Part II – Collaboration and Principled Negotiations
Part I – Bargaining or Positional Negotiations
This part will shed a light on the following topics:
• Distributive Bargaining
• Preparations for Negotiation
• How to conduct oneself, and what to expect “At the Negotiating
Table”.
1.1 – Distributive Bargaining
When we wish to procure or acquire a certain commodity, or fulfill some need
of ours, and there is no a priori price tag affixed to it, we will need to determine the
details or price of that item, with the seller or owner or supplier.
32
It could be: a job interview – the compensation to be determined; buying or
selling a certain item, the price to be determined; or a pay raise for the workers –
the percent to be determined.
In all of the above, we have TWO sides, each with it’s own solution to the
topic at hand, and an attempt to move towards ONE agreed solution.
To make matters simple, let us remain with the buy / sell example. Each side
will have prepared in advance, two different offers or prices:
• Entering Price (EP) – The first and beginning price offered or
requested.
• Leaving Price (LP) – The final price offered or requested. If this
price is cannot or will not be met, we will “leave the table”.
It is obvious, that the seller would wish to maximize his income from the
sale, and thus would begin the bargaining, by placing a high entering price tag to
the item.
The potential buyer, on the other hand, would wish to minimize his expense,
and so would offer a low entering price.
The continuum between the buyer and seller’s respective EPs, would become
the full negotiating range. As it is not likely that the buyer would pay MORE than
the seller is asking for, and the seller would not accept LESS than what the buyer is
willing to pay.
Will the buyer and seller reach an agreed solution? This depends, not on their
EPs, but on the relative position of their LPs.
We have three options:
• LPs do not meet. There is an un-bridged gap between
them.
• LPs meet.
• LPs overlap, creating a new range, wherein they can bargain,
and distribute this range between them.
33
34
It all seems quite simple, but there is a “catch”:
• What are the factors that influence our decision in deciding our EP?
• Should we be the first to disclose and present our EP to the other
side (make the first offer)?
• How do we know where we are on the continuum, when we do not
know the other side’s LP?
These are not simple questions, and the answers are not definitive. What
may be appropriate for situation A, may not be appropriate for situation B. dealing
with Mr. X is not as dealing with Mr. Y.
In general, it should be accepted that the opening offer, is rarely the closing
offer. And that EP>LP for the seller, and EP We are not always, completely in the dark. In some cases, we have
knowledge of the range, within which an agreed price could be found. For example:
when we are negotiating the sales commission of a salesman, we know the total
sales amount, and only need to decide on how to distribute this amount between
the salesman and the company.
In the bargaining of many items: a 2002 model X car; a 3-bedroom house in
city Y; or the hourly wages for a qualified technician in the Z industry, we have well
advertised current market values. So, the negotiation range tends to focus around
these figures.
Many times, when the two sides present their LPs, or they are disclosed, and
to avoid unnecessary “horse trading and haggling”, you may see them agree to:
“Splitting-the-Difference”. Thus, reducing tension, and lengthy debates.
As EPs and LPs are not always known, we are operating in a gray area,
where uncertainty prevails. If we wish to sell, and set too high an EP, we may
“frighten off” potential buyers, or if we wish to buy and present an offer way below
the seller’s worst expectations, he will surly walk away. To make matters worse, we
are never sure of the other side’s usage of: words, signals and behavior, as an
indication that “what he says, is what he means” and vice-versa.
35 1.2 – Preparations for Negotiation
It is never “too much” to emphasize the importance of preparation for any
activity we undertake. But it is twice as important and necessary, when we
approach the bargaining and negotiating table.
We have our needs and expectations on one hand, and we have to accept
that the other party has their own. It is most likely, that these needs and
expectations do not coincide. Therefore, we must approach the table, as best
prepared as possible, to extract the maximum from the process.
Gathering and assessing all relevant information, before the actual face-to-
face encounter, will save time and efforts. When faced with a process of significant
uncertainty, a sound preparation, will allow us to better deal with the many
surprising twists and turns we may meet.
As in many other practical fields, you may find many orderly and structured
models, to assist anyone wishing to prepare for a negotiation session. The more the
topic of discussion, becomes complex and wider of scope, the more these
structured models become an indispensable tool. But, taking a pencil in hand and
laying down your main points on a regular sheet of paper, has ALWAYS provided for
better preparations and results.
1.2.1 – Interests and Positions
We aim to achieve our goals and satisfy our needs. Therefore, when
preparing for negotiation, we need to set clear and define these goals and
objectives. These interests are not negotiable, but “hover” over the whole negotiation
process.
All exchange of: communications, options and solutions, are evaluated solely
on their contribution or detriment to my interests.
Based on these interests, I will need to decide what positions I should adopt,
as to best serve my interests. It is on and over these positions that I will negotiate.
Interests are constant. Positions are flexible.
36 The basis of bargaining is that both sides are dependent on the other. Both
sides wish to exchange “something of value” between them, and need to reach an
agreement as to the “value of the something”. When we prepare for bargaining, we
need to create for ourselves a list of all the assets we bring to the exchange table.
These assets will become our “trading cards”.
We never give away any asset we hold, without getting something back in
return.
It is always traded for something else of worth.
Therefore once we have recorded our list of “trading cards”, we will need to
affix a value tag to each. Once this is done, we will need to define our position, for
every “trading card”.
1.2.2 – Notes:
• The higher value we attach to each “card”, the less flexibility we
will have when negotiating our set position.
• What is of importance to us may be of less importance to the other
side. And what may be deemed of little worth to us, may be highly
regarded by them. This difference in the valuation of the “trading
cards” by each side, facilitates cross-trading.
• The more “trading cards” are brought to the negotiation table, the
more options for inter-trade can develop.
1.3 – “At the Table”
Our goal is to reach an agreed solution that will serve our interests. We have
prepared ourselves, and arrive at the table “armed with our good notes” and are
“ready to go”.
At the negotiating table, we will undergo three phases:
• Phase I – The Discussion
• Phase II – Making and Accepting Proposals
• Phase III – “Closing the Deal”
37 1.3.1 – Phase I – The Discussion
The exchange of ideas, information, offers and counter-offers, requires the
participants to communicate between them.
It is well known, that what message we send to the other side, is not the
same as the message received. And so we must be aware that, the negotiation
situation, where we have two opposing sides, enhances the probability of
misinterpreted messages.
We should always bear in mind, that a professional: approach, attitude and
style, will ensure that discussions will focus on the issue at hand, and not slide
towards antagonistic behaviors, that serve no purpose.
Presenting our stand on the issues, listening to the other party’s presentation
of their stand on the issues, and the exchange of relevant information is the
preliminary phase. This discussion, usually takes the major portion of the
negotiation process, but it is NOT in itself, negotiating per-se, as we do NOT
negotiate information.
The outcome of the negotiation is dependent to a great extent, on the
atmosphere and conduct of both sides, in this phase. Therefore, we need to know
what constructs a positive and constructive discussion, and what is detrimental and
damaging.
Again, positive or negative behaviors are measured only, by their
contribution to reaching our set goals.
What Not To Do:
• Behaving or saying words that will cause anger and irritation.
• Interrupt or block our counterpart’s speech. We have come to listen
to what the other side has to say, to learn about their concepts,
perceptions and positions. This is valuable information, and could
be missed, if we do not allow them to express themselves.
• A verbal attack on the other side, is devastating. People react to an
expression of: blame, accusation or threat, in a personal way. They
will counter attack, adopt a much more rigid and entrench their
stance.
38 • Do not attempt to “convert” the other side to accept “your” beliefs,
by way of: “your way is wrong” vs. “my way is right”.
What To Do:
• In general, one should adopt the behavior that best serves one’s
interests. In simple words: a direct, polite and professional
behavior has been found to work favorably in most discussions.
• Present data, information and statements, in a factual and neutral
manner, without a personal interpretation or coloring attached to
them. • Look for inhibitions. By being attentive to the other side’s words,
we may discover, what is holding them back, or inhibiting their
progress.
• Demonstrate calmness throughout the process. Reassure your
counterpart, that he is regarded as such, and not as an adversary.
Maintain a practical forward and solution-seeking attitude.
• Ask questions. By asking, you show interest, and can use the
information derived, to better understand the situation and the
other side’s positions.
• Keep notes, and summarize what has been said and presented.
• Keep a cool head and be patient. Do not get all excited from the
“opening declarations” and “high entering demands”. Haste begets
mistakes, and a short temper begets anger and tension.
• We are NOT infallible, it is always wise, to check ourselves! We may
have made a mistake on the way, or come upon some inaccurate
data.
1.3.2 – Phase II – Making and Accepting Proposals
Proposals are an indication of our readiness to reach a solution. We must
keep the momentum going, and as we have accumulated the required information
and understanding of all the aspects pertaining to the subject of our negotiation, we
can begin the process of proposing.
39 1.3.2.1 – Making Proposals
A proposal is NOT the solution to the problem, but an exploratory attempt, at
reaching one. It needs to be presented, as a serious attempt and with all
assertiveness, so as not to be dismissed, rejected or ridiculed.
The major point to be made is that in negotiations, there is no “free gain” for
the other side. Whatever we wish to offer, is always conditioned, by some form of
response, we wish to receive.
As we are only exploring the options, it would be beneficial to remain within
a tentative offering on our behalf, but try if possible to be more specific, in what we
want in return.
“If you do “A”, then I will agree to “B”.
Note: the condition precedes the offer!
1.3.2.2 – Accepting Proposals
If you are presented with a proposal, it is advisable to give it and the
presenter, a respectful consideration:
• Listen in full to the proposal.
• If needed, ask questions of a clarification nature.
• Reflect and take your time in responding.
• Present a counter proposal.
Remember, we had several “trading cards”. We can make proposals on
individual items, or at times on batches of items. But, in the process, even if we
agree to a certain proposal, it should be made clear, that this partial agreement is
subject to our reaching an agreement on ALL the issues.
1.3.3 – Phase III – “Closing the Deal”
If proposals were tentative in nature and wording, than now we have reached
the point where we need to be explicit and specific. This is the stage, where:
• We go into details, careful wording, and specific detailing.
• We may need to continue and negotiate in this phase, on the
finer details, but we are much closer to agreement than ever
before.
40 • We can link our assets. Using each asset’s “trading value” in
keeping the momentum going, and avoiding a “deadlock”.
• Carefully kept records of the proceedings, maintained
throughout the whole session, will allow for a better summation.
We will not need to rely on memory, or in worse cases, re-
discuss previous issues.
• We may need to introduce or allow for professional assistance,
like legal advisors, to assist us in the final stage, of transforming
an agreed verbal solution, into a documented and legal paper.
Negotiating through the above phases, may take the form of a 10-minute-
quick-decision, to lengthy meetings and many heated discussions. You may find
that the negotiations may go back and forth, moving fast and agreeing fast on one
item, but getting all bogged down on another.
It is of great importance, to understand that one should not attempt to
bypass the preparatory and optional solution finding phase, and try to “close the
deal”, before it is time.
1.4 – Summation of Part 1 – Bargaining or Positional Negotiations
Distributive Bargaining in essence is the division of the distance (the
Negotiating Range), between the two sides. Of course, each side wishes the
outcome to be, if not exactly, than as close as possible to its own solution (each
side will wish to receive as much as possible and give as little as possible).
Bargaining lies within the realm of uncertainty. We are never sure, if what
the other side is showing us, is the best he can or is willing to do. Preparing for a
bargaining or negotiating session, will partially reduce this uncertainty, and will help
us in organizing our definitions of our goals and wants. Once these interests are
defined, everything we do, will serve but ONE purpose: the achievement of these
interests. Allocating the appropriate time and resources for a solid preparation, may be
the most worthwhile and contributing factor for efficient and productive
negotiations.
41 We may or may-not, reach an agreement, but we will enhance the
probability of success, if we adopt constructive behaviors and avoid destructive
ones.
The negotiating process goes through a preliminary-phase of discussion
between the two sides, the purpose being, to identify and understand the playing
factors pertaining to our subject. We cannot rush or leap over this phase. Only
when the factors are clear, can we prepare to offer or contemplate offered
proposals.
We should never give away something for free. Proposals are always
conditional.
Part 2 – Collaboration and Principled Negotiations
2.1 – Introduction
Roger Fisher and William Ury have contributed a new and interesting
method, to the field of conflict resolution. Their “Principled Negotiation” method, is
in essence an interest-oriented approach to negotiation, having the parties reach an
agreed solution, by going through a collaborative process.
The authors argued, that most negotiations, take the form of positional
bargaining. This form does not produce good results, and brings much adversary
behaviors to the negotiating table, as there are TWO opposing sides, each wishing
to get as much of “the pie” as possible.
They further argued, that a good agreement, is defined by being: “wise and
efficient, and which improves the parties’ relationship”. Our overall consideration
should be to satisfy our interests, and retain good working relations, between the
negotiating parties.
Thus, they advocate the concept of a collaborative win-win approach. The
principles being: (a) Separate the people from the problem; (b) Focus on interests,
not positions; (c) Generate options for mutual gain; (d) Insist on using objective
criteria; (e) Know your BATNA.
42 The benefits of collaborative negotiating are:
• Keeping the relationship between the two parties intact. When
negotiations go well, they become trust building blocks,
contributing to lowering tensions, and approaching future
disagreements as such, and not reach escalated levels of full-
scale conflicts and “wars”.
• Collaborative negotiating is fairly simple to learn and implement.
It is more of a straightforward structured technique, than a
sophisticated and complex strategy.
• It is time saving, as both sides are focused on working together
on mutual solutions, and not “playing” power games or stalling
tactics.
• The core of this process, is creative problem solving. Therefore
more options and better ones are generated by the parties, than
would have surfaced in a non-collaborative meeting.
2.2 – Principle I – Separate the People from the Problem
People, have the propensity of identifying themselves and becoming
personally involved in their side’s position. This will result in them responding and
reacting to our responses, in a personal manner, to the extent of it being a personal
attack on them.
Once we separate the people from the issues, both sides can focus on the
issues, and also retain a professional working relation between them.
We must address the issue of difference itself, keeping ourselves and the
discussions focused, and ensure that it does not become personal. As this can and
will only waste time, and lead us away from the substantive “heart of the matter”.
Do not attack your counterpart personally, and if you suffer a personal
attack, keep your cool, and avoid an emotional reaction.
Fisher & Uri, identify three people related problems: Perceptions, Emotions
and Communications.
43 2.2.1 – Problem I – Perceptions
There is never an absolute truth, or an “objective reality”. People perceive
and interpret the world and its issues, in different ways.
And in our case, these perceptions, are the key to identifying the problem at
hand, and the possible solution.
The fundamental point, is to understand the other side’s viewpoint of the
matter. We need to approach the negotiations, without regarding the other side as
the “enemy” or that they are only interested in beating us in a competitive duel.
2.2.2 – Problem II – Emotions
Negotiations can be short or very long in the making. But it is
understandable that emotional reactions may surface. From low-level anxiety, to a
full demonstration of fired temper or fear.
The problem is that these emotions, become intertwined and with the “real”
issues, making them difficult to identify, and harder to respond to.
First and foremost, we need to accept that a display of emotions, may
surface, at some point or another, at the table. We should never dismiss or ridicule
them, but attempt to understand the reason underlying this display or outburst.
An emotional response from us, to an emotional expression displayed by the
other side, may only make a bad situation, worse. Many times, showing empathy
and genuine consideration, may help in lowering the intensity of the emotional
feeling.
I would like to add, that many times, negotiations are carried out in
continuous and very stressful meeting or meetings. Physical fatigue and tiredness,
play a substantial part in the ability to focus, and many times, nervous emotional
outbreaks occur, due to lack or minimal hours of sleep.
44 2.2.3 – Problem III – Communication
Fisher & Uri, break the communication problem, into three types:
• Not Speaking – there are instances where the negotiators, are
not actually talking to one another, or addressing their
counterparts, but are “grandstanding”, and presenting a “show”
for the benefit of some external audience, or their principles
“standing in the wings”.
• Not Listening – while side A is talking, side B is busy preparing
and planning their own next-steps or responses. Not to mention,
the extreme rudeness of the act, the non-listener, is missing
and losing many pieces of important information.
• Misunderstanding – although, they may be speaking, and they
may be listening to one another, this does not preclude the
possibility of a misunderstanding or misinterpretation.
• The skillful, negotiator, will always directly address and listen to
his counterpart, with full attentiveness. This is done, by asking
clarifying questions and summarizing the major points.
If both sides, approach the table, regarding their fellow negotiator, as such,
and not as an adversary, it is with great likelihood, that there will be no side-sliding
from the main issues, to tangent personal problems.
2.3 – Principle II – Focus on Interests, not Positions
2.3.1 – Interests vs. Positions
Fisher & Uri in their own words say: “Your position is something you have
decided upon, your interests are what caused you to so decide”.
Here in essence is the difference between interests and positions. The former
– being an outcome or result we wish to achieve, while the latter is our stance or
opinion on the issue.
We need to identify our own interests, and then decide on our tactical
positions. Furthermore, we need to understand what the interests of our
negotiating partner are (what are his needs and wants), and attempt to find mutual
and shared interests, or in other words: “Look for common ground”.
45 2.3.2 – Defining the Problem
Problem definition needs to be depersonalized, and should focus on the
interests, not on the positions. Furthermore, it is important to reach agreement or
consensus on this problem definition.
When it is so defined, chances for a solution, that will satisfy both sides, are
greatly improved.
Note – Accepting the point, that both problem and solution, should be
interest oriented, is the key to “integrative bargaining.”
2.4 – Principle III – Generate Options for Mutual Gain
Brainstorming
Once negotiators have identified the problem and their interests, and found
common ground between them, they can begin the process of generating possible
solutions. A possible solution, is one that addresses, presents and provides an
answers for both sides’ interests.
If a session of Brainstorming, is initiated by the parties, they can “put on the
table” possible solutions, to be seen and evaluated by all present. This technique,
allows for creativity, taking one idea and adding and bettering it. Many times
brainstorming, enhances “thinking outside the box”.
To maximize the outcome of a brainstorming session, it is generally broken
down into three parts: Idea Generation, Idea Evaluation, and Choosing a Solution.
Idea Generation
This is the most creative part. Everyone is encouraged to “throw-in” an idea,
suggestion or solution. There is no criticism or ridicule, as this will call off the
willingness to participate, and diminish the creativity flow.
Note – if each side is represented by a team, all participate, regardless of
their: title, rank or function. Good ideas, are not limited to come solely from the
“boss”!
All “contributions” are quickly recorded “as is”, with no commentary or
evaluation, generally on a blackboard or flip chart, in clear view of all participating.
46 Idea Evaluation
The negotiators, now need to develop criteria, in the light of which they will
evaluate the generated list of ideas and suggestions. They will carefully check for
feasibility and whether the proposed solution meets the basic requirements and/or
constraints.
The idea, is to reduce the list to a smaller number of possible and realistic
solutions.
Choosing a Solution
The “short list”, is subjected to an enhanced scrutinizing analysis. It is
common practice, to use models of evaluation and assessment, and to take the
“good parts” from one suggestion to improve on another.
The outcome is a solution that meets all criteria, and serves best the
interests of both parties, maximizing their mutual and collaborative gains.
The stage is now ready, to turn the agreed solution, into a written document
summarizing the points agreed, and serving both sides as a binding contract.
2.5 – Principle IV – Insist on Using Objective Criteria
Both sides should avoid measuring their decisions, based on their personal
(and biased) feelings and emotions, or subject to external pressures. In many cases
both sides can (and should) find and agree to objective standards.
Objective criteria can be derived from the following possible sources:
Scientific and/or technological data; standards commonly used by professional
bodies; legal precedents pertaining to our issue and published data sheets of similar
transactions.
An objective criteria, is regarded as being “neutral” or “fair”, and can be
accepted as a mutual agreed standard.
47 2.6 – Principle V– Know your BATNA
When negotiating, one needs to have a sound idea of ones options and
alternatives. Negotiating is between two sides, in most cases of different power.
Not always is the solution that both sides can concoct between themselves,
preferable to the alternative, of not reaching an agreement.
It is more than reasonable for me to reject a poor agreement and leave the
negotiating table, if I assess that my overall situation will not be improved by this
agreement. To what do I compare, the proposed solution? To my BATNA.
My BATNA (Best Alternative To a Negotiated Agreement), is my “walk-away-
price”, or in other terms: the course of action I will take if I do not reach an
agreement. Without having a clear BATNA, I am negotiating in the dark. I must have a
clear knowledge of my options and alternatives, so as to have a clear benchmark,
against which, I can measure the proposed solution. Otherwise I may find myself
accepting an agreement that is far worse than the one I might have gotten, or
reject one that is far better than I might otherwise achieve.
2.7 – Summation of Part 2 – Collaboration and Principled Negotiations
When both sides decide to work together, laying aside their quest for
individual gains, for an attempt to achieve an optimal mutual gain, they have
chosen to collaborate.
The “Raison D’Etre” behind this, is to overcome the “horse-trading” part of
bargaining, and both sides have no need to adopt a competitive or aggressive style,
or be concerned with the possibility that they may be showing “signs of weakness”.
Putting aside personal issues and focusing on interests, creates a different
working environment, that allows for initial trust to grow, enabling the best
probability for effective negotiations.
48 Chapter Five – Third Party and ADR Methods
1. – Introduction to “Third Party” and ADR Methods
If the parties cannot (or will not), be able to resolve their differences, by the dispute resolution (ADR) options.
ADR, as used today7[1], refers to an array of dispute resolution processes
that are alternatives to traditional court litigation and trial by judge or jury. The two 2. – Mediation
When differing parties are involved in a dispute, it is beneficial and most
effective when the conflict is handled immediately. If the two disputing parties have
tried to resolve the issue on their own but for various reasons were not able to reach a
resolution, a mediator may be useful and most effective. One-way of handling a
dispute is to bring in a third-party we call mediator. Mediation opens channels of
communication, gathers intelligence, increases the likelihood of a peaceful resolution
to a crisis situation and produces options for the resolution.
We will try to highlight the following points: (a) What is mediation? (b) Why
Mediation Works. (c) Benefits of Mediation. (d) Enforcing Agreements Made at
Mediation. (e) Important Attributes of the Mediator.
2.1 – What is Mediation?
Mediation is an informal process in which a neutral third-party assists the
disputing parties in exploring issues in the case. The role of the mediator is to
facilitate discussion between the parties and guide them in finding creative, mutually
7[1] Netzley, M. (2001). Alternative dispute resolution: A business (and) communication strategy Business 49 acceptable, and resolution of disputes. It encourages collaboration of both parties to
work together.
The mediator does not control the outcome. Moreover, the process of
mediation is_ Impartial, neutral, balanced and safe. Therefore, the mediator’s
responsibility is to assist each party equally and cannot favor the interests of any one
party over another, nor any particular result in the mediation. Solutions cannot
result from coercion or intimidation and mediators help ensure that parties reach
agreements in a voluntarily informed manner.
The process of mediation is not guarded by formal rules and regulations. The
participation of the disputing parties is voluntary and mediation process is non-
binding. The mediator has no power to render a decision or to force the parties to
accept a settlement.
Furthermore, a mediation session is confidential and private. Anything
discussed during the mediation and any documents presented for the mediation
cannot be used by any party outside of the mediation process, or in litigation or trial.
This minimizes fears that what has been said may be used against them outside of
the mediation. Confidentiality creates a safe environment that enables parties to share
openly.
A mediation session often begins with a joint meeting involving the mediator,
the parties in dispute, their attorneys, and perhaps specialists that may help both
parties and mediator obtain necessary information pertinent to the issue. (Involving
attorneys and/or specialists depends on the seriousness of the issue and relationship
of the parties.) Beyond the joint meeting, the mediator will sometimes separate the
parties and begin meeting with them in a sequence of private, confidential meetings
called “caucuses”. In these caucuses, the mediator works with each of the parties to
examine their case and develop options for resolution.
2.2 – Why Mediation Works
According to the American Arbitration Association, over 85 % of all mediations
result in a settlement. There are numerous reasons why mediation works even when
the parties have been unable to settle the case themselves.
50 Negotiations between parties or their attorneys may never take place without
the assistance of a mediator because they fear that working together towards a
reasonable settlement offer will be misunderstood as being “weak”. Hence,
mediation provides a safe environment for negotiation because the mediator can
control and direct the communications.
Parties involved in conflict may lack negotiation skills. The mediator can help
relieve this through his involvement in finding out more about the issue. The
mediator can keep the parties focused on exploring productive avenues to
settlement. Mediation provides the opportunity for all parties to meet for the purpose of
discussing settlement. All decision-makers necessary to resolve a problem are
usually present. Since the sole purpose of the meeting is to find a resolution,
these decision makers can focus on reaching a settlement at once.
Information is presented in an organized fashion. The mediation session
normally provides each side with a more realistic view of the opposing position.
Mediation allows each side to test settlement proposals by privately conveying
it to the mediator during a caucus. This allows each side to fully explore settlement
options without negotiating against each other.
Mediation offers a more realistic look at their case and what results they are
likely to achieve in court or arbitration. As this happens, their positions on
settlement become more reasonable and flexible.
Mediation assists the parties in developing options for settlement. The
mediator can assist the parties to clearly see their objective and to consider
alternative solutions.
2.3 Benefits of Mediation
There are many advantages of using mediation when utilized early on in the
dispute. Listed below are some of the advantages:
• Disputing parties are able to find creative and mutually acceptable
resolutions in a controlled environment.
• Working together to solve problems leads to improved long-term
relationships and better work productivity. In return, the
51 organization will spend less time searching for new employees
and turnover rates of employees will be substantially lower.
• It can prevent conflict from escalating into more serious
disputes.
• Mediation promotes principles and practices of trust that facilitate
communication and healthy working relationships.
• Early mediation can be most cost effective for the settlement of
the issues, relative to litigation or long-term fighting. For instance,
litigation expends far more time, energy, and money. A suitably
planned mediation experience can be pursued with less delay, and
far less momentary expense than any other remedy.
• Since the mediator does not control the outcome, mediation is
low-risk. The parties have control and predictability over the
outcome of their dispute.
• Since mediation is voluntary, nothing occurs without the consent of
both parties. It retains a high degree of control for the parties
involved.
• The mediation process is confidential and cannot be used as
evidence outside of the matter.
• Settlements are more rapid compared to litigation where it may
take as long as a year to get a court date, have the case
appealed, and actually try.
2.4 – Enforcing Agreements Made at Mediation
After a lengthy mediation and long bargaining, how should you memorialize
your agreement to assure that its terms will be enforced? Frequently parties involved
in mediation often question how to create and enforce a binding agreement. Here are
steps to take in order to enforce agreements made in mediation.
• Everyone whose authority is necessary in order to settle the
conflict should be present at the mediation session. If absent,
their written authority or consent must be obtained before the
mediation has been adjourned.
52 • All terms and conditions of settlement should be summarized in
the presence of all participants. The terms should then be in
written form and signed by all participants.
• Attorneys may have the parties sign releases of liability and
sometimes a more formal settlement agreement.
2.5 – Important Attributes of the Mediator
When using a mediator it is important to use one that possesses the right
qualities to make the mediation process effective. Some important attributes of a
mediator are:
• Must be patient but persistent.
• Does not rush things.
• Must think quickly on their feet, show creativity, display intuition, and
have active listening skills.
• Establishes a sense of trust between the two parties.
• Has intense focus.
• Must be unbiased and able to stay objective.
2.6 Mediation Summary
Although mediation works for the most part, there are times when it does not.
Some problems in mediation arise when there is a lack of settlement authority where
the necessary party(ies) do not attend the sessions. The lack of preparation on the
part of the mediator also reduces the effectiveness of mediation. Furthermore, bias on
the part of the mediator where one side or solution is favored causes serious
problems. In order to have a successful mediation process, it is not enough to merely
want to settle a dispute. A successful mediation requires commitment on both
parties and a skillful and neutral mediator. If all parties and counsel commit to
resolving the dispute, there will be a settlement. Without the parties’ participation
mediation cannot evolve into a resolution. When all the elements are present,
mediation is beneficial and effective.
53 3. Arbitration
3.1 Introduction
In arbitration, both sides agree to present their respective cases, to an
agreed neutral arbitrator for a decision. The key word being – Decision. Arbitration
may be binding or nonbinding (advisory). The parties agree in advance that the
decision (award) of the neutral is to be final. If the two sides cannot reach an
agreed solution, the arbitrator has the authority to pass judgment and render a
binding solution. Generally, there are no appeals from an arbitrator’s award,
Arbitration may be:
• Court-Ordered – in many cases the court may suggest or rule
that the parties attempt to overcome their differences by
submitting their dispute to arbitration.
• Mandatory – it is common in work agreements and in
commercial trade contracts, to insert a clause that both sides, in
event of a future dispute, agree to arbitrate.
• Voluntary – Voluntary arbitration refers to the arbitration of a
dispute submitted to an arbitrator by agreement of the parties.
Of course this implies that we need a consensual acceptance.
The main reason and consideration for a voluntary choice to
arbitrate, will be to minimize the expense, delay, or publicity
which they perceive will accompany litigation.
In all of the above, the parties must enter into an agreement to arbitrate or a
submission agreement, prior to launching the process.
3.2 Who Uses Alternative Dispute Resolution?
Wherever we find conflicts, be they of a: personal, organizational,
community, national and international sort, we will see that ADR methods will be
suggested, and if found useful – implemented.
The American Arbitration Association, prides itself with dealing with hundreds
of thousands of dispute cases, in the areas of: business, insurance, labor relations,
54 environment, public policy, family, securities, technology, employment,
international trade, and many more.
Two major areas that we may observe preference for ADR methods are:
• International Commerce – many firms incorporate arbitration
clauses in their contracts to avoid litigating in a foreign court. As
proceedings are informal, we can use translators and local resident
foreign nationals, to present the case, conduct video conferencing,
all of which are oriented to expedite procedures.
• Labor-Management disputes – this is a major area where we may
see the Mandatory option of arbitration. Whereas many
organizations, imbed within their employment contracts, provisions
calling for the arbitration of grievances that cannot be settled,
within the “normal” workplace hierarchy. The disputes arbitrated
are most common in the areas of: disciplinary actions, termination,
promotion and demotion decisions, tenure, and pensions and
benefits of retired personnel.
3.3 Benefits of Arbitration
In general, most people wish to avoid the lengthy and costly procedures of
lawsuits and Litigation. It is true to say, that litigation like war, is something you
know how you enter, but never know how you come out of, in the end. In addition
to the ever-growing costs accrued overtime, in lower courts and higher-level courts
of appeal, we suffer from stress related consequences, and in many cases, what
was a simple and private matter, becomes an item of gossip and unwanted
publicity. In a nutshell, Arbitration is: faster, cheaper and final.
The AAA summarizes the following benefits and advantages of arbitration:
• Speed: Despite the best efforts of our court systems to improve
processing time of civil disputes, the burdens of criminal cases,
tight budgets, and other factors still create delays of years to
bring a case to court in many jurisdictions. Appeals extend the
time required to reach a final result still further. In ADR there is
no “docket” – no line in which to wait for your day in court. The
55 only elements governing speed are the eagerness of the parties
to end the dispute and the complexity of the cases to be
resolved.
• Choice and expertise of impartial neutrals: Parties who resolve
their disputes through ADR enjoy the assistance of neutrals who
are already expert in the subject matter of their disputes. For
example, parties to a construction industry dispute might select
an architect, a contractor, or a lawyer with a lifelong practice in
construction law to serve as their mediator or arbitrator. The
“subject matter expertise” of the neutral reduces the time
typically required to attempt to educate a judge or jury about
the technical elements of a dispute, and raises the confidence
level of the parties, that the result of the process will be well
informed.
• Informality and Flexibility: Alternative dispute resolution is
conducted in a manner that is more businesslike than litigation.
Each party tells its side of the story to the arbitrator in an
atmosphere that is less formal than a court proceeding. Since
the parties control the process, they enjoy tremendous
flexibility. Hearings might take place at the site of the dispute or
during evening hours. Testimony might be taken by telephone.
• Privacy: Arbitration, Mediation and other forms of ADR are not
open to public scrutiny like disputes settled in court. The
hearings and awards are kept private and confidential, which
helps to preserve positive working relationships.
• Economy: Time saved is money saved. ADR processes are
designed to be faster, more streamlined, and more informal
than litigation. Many of the costly procedures associated with
formal court processes, such as filing appeals, and motions can
be eliminated.
56 3.4 The Neutral’s Qualifications and Qualities
As in mediation, arbitrators selected for this task, should posses certain
essential qualities. The more proficient the arbitrator is in conducting these
hearings, the more knowledgeable of the statutory issues of the dispute, and the
more he is familiar with common and/or specific workplace formal and informal
structure and relations, the easier it will be for him to “jump into the water”.
Furthermore, it provides for a higher level of confidence on the part of the parties,
towards him.
Of all qualities, it is obvious, that the arbitrator should be first and foremost,
objective and independent of bias toward either party.
Other qualities of importance (emphasis on the business arena):
• Dispute management skills
• Judicious temperament: impartiality, patience, courtesy
• Strong academic background and professional or business
credentials
3.5 Arbitration and the Law
Arbitration is most attractive in its finality, and being legally binding and
enforceable in most jurisdictions. Arbitration agreements and awards – are enforced
by the “The Federal Arbitration Act”, in interstate-commerce and international
contracts.
Therefore we will see a growing usage and inclusion of an arbitration clause
in a commercial or employment contract / agreement between the parties.
57 Part II – Negotiations Chapter Six – Bargaining I
Part I – Distributive Bargaining
When we wish to buy milk at the local supermarket, we have a fixed price
depicted on the shelf, and then it is up to us to decide whether to purchase the
item at this price.
But when we do not have an a priori price tag affixed to the item, we face a
different situation. Examples:
• We are about to be interviewed for a new job, the compensation to be
determined.
• We have decided to buy or sell a certain item, the price to be
determined. • The Union representatives are to meet Management on a pay raise
demand, the percent to be determined.
What do these examples all have in common? We have TWO sides, each with
it’s own solution to the topic at hand, and an attempt to move towards ONE agreed
solution.
Remaining with the buy / sell example, we will see that each side will have
prepared in advance, two different offers or prices:
• Entering Price (EP) – The first and beginning price offered or requested.
• Leaving Price (LP) – The final price offered or requested. If this price is
cannot or will not be met, we will “leave the table”.
It is obvious, that the seller would wish to maximize his income from the the item.
The potential buyer, on the other hand, would wish to minimize his expense, and so would offer a low entering price.
The continuum between the buyer’s and seller’s respective EPs, would
become the full negotiating range. As it is not likely that the buyer would pay MORE
58 than the seller is asking for, and the seller would not accept LESS than what the
buyer is willing to pay.
Will the buyer and seller reach an agreed solution? This depends, not on their EPs, but on the relative position of their LPs.
We have three options (see graph):
• LPs do not meet. There is an un-bridged gap between them.
• LPs meet.
• LPs overlap, creating a new range, wherein they can bargain, and
distribute this range between them.
59 60 It all seems quite simple, but there is a “catch”: • What are the factors that influence our decision in deciding our EP?
• Should we be the first to disclose and present our EP to the other side
(make the first offer)?
• How do we know where we are on the continuum, when we do not know the other side’s LP?
These are not simple questions, and the answers are not definitive. What with Mr. X is not as dealing with Mr. Y.
In general, it should be accepted that the opening offer, is rarely the closing offer. And that EP>LP for the seller, and EP Further more, as the bargaining gets closer to the LPs, the movement slows
down, and each side will become less flexible in his behavior.
We are not always, completely in the dark. In some cases, we have the salesman and the company.
In the bargaining of many items: a 2002 model X car; a 3-bedroom house in these figures.
Many times, when the two sides present their LPs, or they are disclosed, and “Splitting-the-Difference”. Thus, reducing tension, and lengthy debates.
As EPs and LPs are not always known, we are operating in a gray area, 61 Part II – Preparations for Negotiation
It is never “too much” to emphasize the importance of preparation for any approach the bargaining and negotiating table.
We have our needs and expectations on one hand, and we have to accept prepared as possible, to extract the maximum from the process.
Gathering and assessing all relevant information, before the actual face-to- surprising twists and turns we may meet.
Basic information (just the tip of the iceberg) to be gathered, for the previous
examples:
• Job interview – what is common compensation in the organization, for
similar jobs and similar employee qualifications.
• Sales – conduct a market survey (check internet comparative sites), to
find the value of similar items. What factors increase or decrease the
price. • Union – what pay increases were achieved by other unions in the
industry? What is the financial strength of the organization?
There is nothing more frustrating, than making a decision, and learning that,
you could have bettered the outcome, if you had just made the effort of preliminary
preparation and information gathering.
As in many other practical fields, you may find many orderly and structured structured models become an indispensable tool.
62 Interests and Positions
We aim to achieve our goals and satisfy our needs. Therefore, when objectives.
These interests are not negotiable, but “hover” over the whole negotiation on their contribution or detriment to my interests.
Based on these interests, I will need to decide what positions I should adopt, Interests are constant. Positions are flexible.
Example: Due to the growth of my business, I have decided to purchase a
new delivery truck. My budget constraint is X thousand dollars.
My interests are:
• Buy truck.
• Do not exceed budget.
My positions will be:
• Price (anything below X thousand dollars);
• Make and model;
• Payment options;
• Warranty options. etc.
The basis of bargaining is that both sides are dependent on the other. Both agreement as to the “value of the something”.
When we prepare for bargaining, we need to create for ourselves a list of all
the assets we bring to the exchange table. These assets will become our “trading
cards”.
We never give away any asset we hold, without getting something back in return. It is always traded for something else of worth.
63 Example: when the union leaders approach management, they have listed
their “trading cards”: production quotas; working hours; higher level of production
quality.
Management can trade: amount of pay raise; schedule of payments; other
incentives.
Therefore once we have recorded our list of “trading cards”, we will need to affix a value tag to each one. Once this is done, we will need to define our position,
for every “trading card”.
Note:
• The higher value we attach to each “card”, the less flexibility we will
have when negotiating our set position.
• We should always remember: what is of importance to us may be of
less importance to the other side. And what may be deemed of little
worth to us, may be highly regarded by them. This difference in the
valuation of the “trading cards” by each side, facilitates cross trading.
• The more “trading cards” are brought to the negotiation table, the more options for inter trade can develop.
We have gathered the basic information, defined our interests and positions,
and have prepared a list of our prioritized “trading cards”. But once we approach
the table, and hear what the other side has to say, what worth and what weight
they attach to each topic of discussion, we will need to update and adjust our own
initial evaluation.
64 Chapter Seven – Bargaining II – “At the Table”
Our goal is to reach an agreed solution that will serve our interests. We have “ready to go”.
At the negotiating table, we will undergo three phases:
• Phase I – The Discussion
• Phase II – Making and Accepting Proposals
• Phase III – “Closing the Deal”
Phase I – The Discussion participants to communicate between them.
It is well known, that what message we send to the other side, is not the same as the message received. And so we must be aware that the negotiation
situation, where we have two opposing sides, enhances the probability of misinterpreted messages.
We should always bear in mind, that a professional: approach, attitude and towards antagonistic behaviors, that serve no purpose.
Presenting our stand on the issues, listening to the other party’s presentation preliminary phase.
This discussion, usually takes the major portion of the negotiation process,
but it is NOT in itself, negotiating per-se, as we do NOT negotiate information.
The outcome of the negotiation is dependent to a great extent, on the damaging.
Again, positive or negative behaviors are measured only, by their contribution to reaching our set goals.
65 What Not To Do:
• Behaving or saying words that will cause anger and irritation. We are
not interested in creating an antagonistic atmosphere that will have an
adverse effect.
• We have come to listen to what the other side has to say, to learn
about their concepts, perceptions and positions. This is valuable
information, and could be missed, if we do not allow them to express
themselves. Therefore, do not interrupt or block their speech.
• If causing anger and irritation, should be avoided, than a verbal attack
on the other side, is devastating. People react to an expression of:
blame, accusation or threat, in a personal way. They will counter
attack, adopt a much more rigid and entrenched stance, and if they do
not leave the table altogether, it will be extremely difficult to return to
a forward-looking discussion.
• Do not attempt to “convert” the other side to accept “your” beliefs, by
way of: “your way is wrong” vs. “my way is right”.
What To Do:
• In general, one should adopt the behavior that best
serves one’s interests. In simple words: a direct, polite
and professional behavior has been found to work
favorably in most discussions.
• By presenting data, information and statements, in a
factual and neutral manner, without a personal
interpretation or coloring attached to them, assures that
they will be accepted as to their true content, and not
misjudged (or in worse cases – rejected), due to
destructive behavior.
• Look for inhibitions. By being attentive to the other side’s
words, we may discover, what is holding them back, or
inhibiting their progress.
66 • Demonstrate calmness throughout the process. Reassure
your counterpart, that he is regarded as such, and not as
an adversary. Maintain a practical forward and solution-
seeking attitude.
• Ask questions. By asking, you are showing that you are
interested in what the other side has to say, and can use
the information derived, to better understand the
situation and the other side’s positions, all to be used in
your favor.
• Keep notes, and summarize what has been said and
presented.
• Keep a cool head and be patient. Do not get all excited
from the “opening declarations” and “high entering
demands”. Haste begets mistakes, and a short temper
begets anger and tension.
• It may sound “strange”, but although we tend to believe
that we are infallible, it is always wise, to check
ourselves! We may have made a mistake on the way, or
come upon some inaccurate data.
• If we can “put aside” personal and emotional behaviors at
the table, and attain a constructive discussion phase, we
will have successfully prepared the ground, to enter the
proposing phase.
Phase II – Making and Accepting Proposals keep the momentum going, and as we have (to the best of our understanding),
accumulated the required information and understanding of all the aspects
pertaining to the subject of our negotiation, we can begin the process of proposing.
67 Making proposals
A proposal is NOT the solution to the problem, but an exploratory attempt, at assertiveness, so as not to be dismissed, rejected or ridiculed.
The major point to be made is that in negotiations, there is no “free gain” for response, we wish to receive.
As we are only exploring the options, it would be beneficial to remain within want in return.
“If you do “A”, then I will agree to “B”.
Note: the condition precedes the offer!
Accepting proposals
If you are presented with a proposal, it is advisable to give it and the presenter, a respectful consideration:
• Listen in full to the proposal.
• If needed, ask questions of a clarification nature.
• Reflect and take your time in responding.
• Present a counter proposal.
Going back to module 2, we remember that we had several “trading cards”.
We can make proposals on individual items, or at times on batches of items.
But, in the process, even if we agree to a certain proposal, it should be made
clear, that this partial agreement is subject to our reaching an agreement on ALL
the issues.
We are in a critical phase. If we can agree to the initial proposals, we can
proceed to closing the deal. But if we fail to agree now, we would need to return to
the discussion phase, and create new proposals for consideration.
68 Phase III – “Closing the Deal” If proposals were tentative in nature and wording, than we have reached the
point where we need to be explicit and specific.
This is the stage, where:
• We go into details, careful wording, and specific detailing.
• Example: If management had agreed to a tentative annual pay raise of
X percent, and in return employees promised a higher production level
of Y percent, we would need to make provisions as to: rate of
payments, increments, payment dates, on one hand, and definitions
and levels of production growth, on the other.
• We may need to continue and negotiate in this phase, on the finer
details, but we are much closer to agreement than ever before.
• We can link our assets. Using each asset’s “trading value” in keeping
the momentum going, and avoiding a “deadlock”.
• Carefully kept records of the proceedings, maintained throughout the
whole session, will allow for a better summation. We will not need to
rely on memory, or in worse cases, re-discuss previous issues.
• We may need to introduce or allow for professional assistance, like
legal advisors, to assist us in the final stage, of transforming an agreed
verbal solution, into a documented and legal paper.
Negotiating through the above phases, may take the form of a 10-minute- quick-decision, or lengthy meetings and many heated discussions. You may find
that the negotiations may go back and forth, moving fast and agreeing fast on one item, but getting all bogged down on another.
It is of great importance, to understand that one should not attempt to deal”, before it is time!
69 Chapter Eight – Negotiation Styles and Communication
What are the factors that affect the way negotiators behave? Is it only their
character? Or is it also a tactical decision to adopt a certain style? In order to answer these questions, we will break the module into three
parts:
(1) Personal Styles
(2) Face-to-Face Communication
(3) Competitive vs. Cooperative Approaches.
Part I – Personal Styles
Some people are outgoing, easy to make conversation, and make decisions make their move.
Knowing your counterpart’s style, will help you to understand who he is, and Susan Onaitis in her book: Negotiate Like The Big Guys , Determines that: “
Most researchers agree that there are a few basic styles that come from the Datacrats; Goalies; Relators; Expressors.
Datacrats – Are very organized people, dependant on the written word, and
base their decisions on the gathering and analyzing of facts and figures. They will
usually work within specific guidelines, and carefully and meticulously take notes of
the procedures.As they are very organized, they do not tend to skip basic steps, or
“jump to the last page”, before they are ready. They pay careful attention to
details, and are solution oriented.
Goalies – Having an outcome or result orientation, these people are always
pushing themselves and others to a “fast track” pace. They will generally do a lot of
talking (less on the listening), mainly due to their belief that they hold (all) the
answers. Emotions are not normally shown, as we have a “job-at-hand-that- needs-
to-be-finished” practical approach. 70 Relators – Establishing good relations, is paramount to this style. They are
attentive and good listeners, and are not rushed for time. It is important for them
to create and maintain good teamwork relations, a pleasant discussion atmosphere,
and avoid any destructive behavior, that may lead to conflict. They will go to the
trouble of showing interest in the other side’s personal life, and may ask many
clarifying questions. These are the people that like to conduct meetings and
negotiations over dinner, or on the golf course, in an informal setting
Expressors – These are the people who do not maintain “a poker face”. They
are open, friendly and outgoing. Many times, they will attempt to capture and place
themselves center stage. They may be easy to read, but they are still creative and
innovative.
Note – One must remember, that although these may be characteristic feelings and assessment of which style best fits the issue and parties involved.
Part II – Face to Face Communication
Negotiation requires communication. No one better than: Fisher, Ury, and
Patton, in their book: “Getting to Yes” defined, that negotiations: “is a process of
communicating back and forth for the purpose of reaching a joint decision”.
When we communicate, we exchange messages with the other side. We
have already stated, that the message sent and the message received, are not
always the same.
Face-to-face communication, can be divided into three forms and skills:
• Verbal messages
• Nonverbal messages
• Listening
Note – these skills are not mutually exclusive or stand alone, we all have Communication style.
Understanding your counterpart’s (and your own), communication style, will
be a helpful factor in the conducting of interpersonal Negotiations.
71 Verbal messages – although this is our primary tool of communicating,
what we say and how we say it, are many times not accepted verbatim and are
open to misunderstanding. Our choice of words and tone of voice, as the usage of
idioms and expressions, may become a communicating bridge, or create a rift.We
should be extra careful in our choice and usage of words, if we know that our
discussion partner, is not savvy of the jargon, or fluent in the language.
Nonverbal messages – in an article titled : “Body talk” by Rob Johnson, the
author presents the following information: “Social scientists conclude that only
about 7% of the emotional meaning of a message is communicated by words, while
38% is communicated by the use of the voice, and 55% by the use of gestures,
posture and facial expressions. Feelings and emotional responses are generally
based not so much on what another person says, but on what they do. There are
many types or cues of non-verbal communication that can be used to contradict,
emphasize or serve as a substitute for verbal messages”.
We communicate and send information by: eye contact, raising an eyebrow
in surprise, smiling, frowning, and the way we fidget on the chair.
We have seen people use physical demonstrations, to catch the attention of
those present, from hand movements and gestures, to removing a shoe and
banging it on the speaker’s podium!
It is the keen observer that will see these messages, and interpret them
correctly and usefully.
Listening – throughout the whole process of negotiation, we are
continuously, gathering information, to be analyzed and evaluated, so as to better
our understanding of the situation, and bettering our stance. Listening is the most
important tool, for achieving these objectives.
The old saying of: “we have two ears and one mouth, therefore we should
use them in similar proportions”, needs no clarification, and is more than
appropriate when negotiating.
Listen attentively and do not interrupt. This will encourage the other side to
continue, and thus provide you with more information. Asking clarification
questions, demonstrates, that you have heard and wish to fully understand the
issue.
72 Part III – Competitive vs. Cooperative Approaches
We began by asking: What are the factors that affect the way negotiators
behave? Is it only their character? Or is it also a tactical decision to adopt a certain
style? We will add now an interesting “twist”, to show, that we may be adopting a
specific approach, not because we want to, but because we must!
In negotiation, we are dependant on the decisions and actions of the other
side. If we present an offer, will they accept or reject? If we are willing to concede
on a certain issue, will they reciprocate, or become greedy, and demand more?
Should we show a willingness to cooperate? And if we do how should we respond, if
they do not?
From the Game Theory field, a simple game, known as the “prisoner’s
dilemma”, has been used to explain behaviors associated with the decision of:
“should I cooperate or should I defect (not cooperate)?”
For an enhanced explanation of the “Prisoner’s Dilemma” – see below
As stated above, we have found, that when a “temptation” to defect (not
cooperate) is a viable option, it will be chosen!
Boone and Macy (1999) summarize it nicely: “From a self-interested
standpoint, no matter what the partner chooses, the best strategy is to defect. The
dilemma is that the optimal choice for each player leads to a sub-optimal collective
outcome”.
Why is this relevant to us? When the game is played once, the outcome is a
solid “no-cooperation”. But if the game is played repeatedly, it was found, that the
best strategy is “tit-for-tat”, or in simple terms: I will reciprocate your behavior, by
behaving in the same manner. In negotiation, if the issue and the parties are in the form of a: “one time
encounter”, we will be tempted to: adopt a strong position; not give in; and be
non-cooperative.
73 But, if we have an ongoing relation with the other party (example –
Management and Union’s annual negotiations), and this negotiation session, can be
the first of many, we need to evaluate the issue under a different light.
If we can break the issue into sub-issues, we will lower the temptation for
“defection”, and enhance the option for cooperation. Furthermore, by dealing with
smaller “stakes”, we will be developing “trust building” blocks, on the road to full
cooperation. Closing the circle, we can see that some negotiators will adopt a strong
competitive approach, while others will adopt a cooperative approach. These
decisions are of a tactical nature, and should be decided upon, subject to the
parties’ assessment of the negotiating issue at hand.
The stronger the dependency between the two sides, the weaker the
temptation to defect and the stronger the mutual trust, the greater chance of both
sides to cooperate, and increase their gains.
74 The Prisoner’s Dilemma
In the classic game, two men were suspected of committing a crime, and
were apprehended by the police.
In their initial questioning, they both would not confess to the crime.
The district attorney decides, that as getting a conviction on both was not
likely, he would be satisfied with at least one conviction. So, he separates the two
prisoners, and offers them the same deal:
(1) Should both decide to confess (defect from their point of view) – they
will each get a medium length imprisonment sentence.
(2) Should both decide to keep their silence (cooperate with each other) –
they will each get a very short term (for some minor charge).
(3) Should one of them confess (defect) while the other decides to remain
silent (cooperate) – the confessor will be free to go, while the “silent”
one; will get a very long imprisonment sentence.
The prisoners are left to make their decisions, and as they have
no way of communicating between them, they do NOT KNOW what the
other will decide.
Their future is dependent on the decision of the other.
Each one in the solitude of his cell weighs the options. The
“temptation” to defect is strong, and the risk of losing everything (if I
keep silent (cooperate) whilst the other side decides to defect), is
unbearable.
They find out that defecting is the optimal decision they should
take, even though, they would have collectively been better off, if they
had both decided on the option of cooperation.
The final outcome is that they will BOTH decide to confess, not
because they want to, but because they must!
75 Chapter Nine –Collaborative or Principled Negotiation
Introduction
Roger Fisher and William Ury have contributed a new and interesting in essence an interest oriented approach to negotiation, having the parties reach an
agreed solution, by going through a collaborative process.
The authors argued, that most negotiations, take the form of positional bargaining. this form does not produce good results, and brings much adversary
behaviors to the negotiating table, as there are TWO opposing sides, each wishing to get as much of “the pie” as possible.
They further argued, that a good agreement, is defined by being: “wise and negotiating parties.
Thus, they advocate the concept of a collaborative win-win approach. The not positions; (c) Generate options for mutual gain; (d) insist on using objective
criteria.
The benefits of collaborative negotiating are: negotiations go well, they become trust building blocks, contributing to
lowering tensions, and approaching future disagreements as such, and
not reach escalated levels of full scale conflicts and “wars”.
• Collaborative negotiating is fairly simple to learn and implement. It is
more of a straightforward structured technique, than a sophisticated
and complex strategy.
• It is time saving, as both sides are focused on working together on
mutual solutions, and not “playing” power games or stalling tactics.
• The core of this process, is creative problem solving. Therefore more
options and better ones are generated by the parties, than would have
surfaced in a non-collaborative meeting. Principle I – Separate the People from the Problem
People, have the propensity of identifying themselves and becoming attack on them.
Once we separate the people from the issues, both sides can focus on the issues, and also retain a professional working relation between them.
We must address the issue of difference itself, keeping ourselves and the will only waste time, and lead us away from the substantive “heart of the matter”.
Do not attack your counterpart personally, and if you suffer a personal attack, keep your cool, and avoid an emotional re action.
Fisher & Ury, identify three people-related problems: Perceptions, Emotions
and Communications.
Problem I – Perceptions
There is never an absolute truth, or an objective reality. People perceive and
interpret the world and its issues, in different ways.
And in our case, these perceptions, are the key to identifying the problem at hand, and the possible solution.
The fundamental point, is to understand the other side’s viewpoint of the matter. We need to approach the negotiations, without regarding the other side as
the “enemy” or that they are only interested in beating us in a competitive duel.
Neither they, nor ourselves, are to be blamed for the conflict, and when we
reach the proposal phase, we should attempt to present an appealing and feasible
one. (this is not a scene from the “God-Father”, where an “offer they can’t refuse”
is made!).
As discussed in our previous module, the discussion phase, is to iron out the
different understandings of the problem, so as to proceed with a shared
understanding.
77 Problem II – Emotions
Negotiations, can be short or very long in the making. But it is
understandable that emotional reactions may surface. From low-level anxiety to a
full demonstration of fired temper or fear.
The problem is that these emotions, become intertwined and with the “real” issues, making them difficult to identify, and harder to respond to.
First and foremost, we need to accept that a display of emotions, may surface, at some point or another, at the table. we should never dismiss or ridicule
them, but attempt to understand the reason underlying this display or outburst.
An emotional response from us, to an emotional expression displayed by the feeling.
I would like to add, that many times, negotiations are carried out in outbreaks occur, due to lack or minimal hours of sleep.
Problem III – Communication
Fisher & Ury, break the communication problem, into three types:
• Not Speaking – there are instances where the negotiators, are not
actually talking to one another, or addressing their counterparts, but
are “grandstanding”, and presenting a “show” for the benefit of some
external audience, or their principles “standing in the wings”.
• Not Listening – while side A is talking, side B is busy preparing and
planning their own next-steps or responses. Not to mention, the
extreme rudeness of the act, the non-listener, is missing and losing
many pieces of important information.
• Misunderstanding – although, they may be speaking, and they may be
listening to one another, this does not preclude the possibility of a
misunderstanding or misinterpretation.
78 The skillful, negotiator, will always directly address and listen to clarifying questions and summarizing the major points, to ensure that
both are: “reading the same music from the same sheet”.
If both sides, approach the table, regarding their fellow
negotiator, as such, and not as an adversary, it is with great
likelihood, that there will be no side-sliding from the main issues, to
tangent personal problems.
Principle II – Focus on Interests, not Positions
Interests vs. Positions
Fisher & Ury in their own words say: “Your position is something
you have decided upon, your interests are what caused you to so
decide”.
Here in essence is the difference between interests and
positions. The former being an outcome or result we wish to achieve,
while the latter, is our stance or opinion on the issue.
We need to identify our own interests, and then decide on our
tactical positions. But, this is only half the work. We need to
understand what the interests of our negotiating partner are (what are
his needs and wants), and attempt to find mutual and shared
interests, or in other words: “Look for common ground”.
This cannot be done by “hiding” your interests. On the contrary,
you work collaboratively with the other side, by exchanging
information. When negotiating, the discussion phase is aimed to meet this
end.
79 Defining the Problem
Problem definition is easier said than done. It needs to be
depersonalized, and should focus on the interests, not on the
positions. Furthermore, it is important to reach agreement on this
problem definition.
When it is so defined, chances for a solution, that will satisfy
both sides, are greatly improved.
Note – Accepting the point, that both problem and solution,
should be interest oriented, is the key to “integrative bargaining.” By
adopting this approach, we immediately are on the path of
collaboration and not confrontation, a path leading to a win-win
outcome. Principle III – Generate Options for Mutual Gain
Brainstorming – When negotiators have identified the problem
and their interests, and found common ground between them, they
can begin the process of generating possible solutions. A possible
solution , is one that addresses, presents and provides an answers for
both sides’ interests. If a session of Brainstorming, is initiated by the
parties, they can “put on the table” possible solutions, to be seen and
evaluated by all present. This technique, allows for creativity, taking
one idea and adding and bettering it. many times brainstorming,
enhances “thinking outside the box”. To maximize the outcome of a
brainstorming session, it is generally broken down into three parts:
Idea Generation, Idea Evaluation, and Choosing a Solution.
Idea Generation – This is the “fun part”, but also the most
creative. Everyone is encouraged to “throw-in” an idea, suggestion or
solution. There is no criticism or ridicule, as this will call off the willingness to participate, and diminish the creativity flow. Note – if
each side is represented by a team, all participate, regardless of their:
80 title, rank or function. good ideas, are not limited to come solely from
the “boss”! All “contributions” are quickly recorded “as is”, with no
commentary or evaluation, generally on a blackboard or flip chart, in
clear view of all participating.
Idea Evaluation – The negotiators, now need to develop
criteria, in the light of which they will evaluate the generated list of
ideas and suggestions. they will carefully check for feasibility and
whether the proposed solution meets the basic requirements and/or constraints. The idea, is to reduce the list to a smaller number of
possible and realistic solutions.
Choosing a Solution – The “short list”, is subjected to an
enhanced scrutinizing analysis. It is common practice, to use models
of evaluation and assessment, and to take the “good parts” from one
suggestion to improve on another. The outcome is a solution that
meets all criteria, and serves best the interests of both parties,
maximizing their mutual and collaborative gains. The stage is now
ready, to turn the agreed solution, into a written document summarizing the points agreed, and serving both sides as a binding
contract.
Principle IV – Insist on Using Objective Criteria
Both sides should avoid measuring their decisions, based on
their personal (and biased) feelings and emotions, or subject to
external pressures. In many cases both sides can (and should) find
and agree to objective standards.
When negotiating a house sale in a specific neighborhood, there
are published data sheets of similar transactions, that can serve as
reference. objective criteria can also be derived from the following
possible sources: Scientific and/or technological data; standards
81 commonly used by professional bodies; legal precedents pertaining to
our issue.
It may be surprising, but most people share a common sense of
“fairness”. Proposing a fair standard, or fair solution, is accepted as
such, and is rewarded by similar responses. An objective criteria, is
similarly regarded as being “neutral” or “fair”, and can be accepted as
a mutual agreed standard.
Principle V– Know your BATNA
When negotiating, one needs to have a sound idea of ones
options and alternatives. Negotiating is between two sides, in most
cases of different power. Not always is the solution that both sides can
concoct between themselves, preferable to the alternative, of not
reaching an agreement.
It is more than reasonable for me to reject a poor agreement
and leave the negotiating table, if I assess that my overall situation
will not be improved by this agreement. Fisher & Uri explain (page
104): “the reason you negotiate is to produce something better than
the results you can obtain without negotiating.”
To what do I compare, the proposed solution? To my BATNA.
My BATNA (Best Alternative To a Negotiated Agreement), is my
“walk-away-price”, or in other terms: the course of action I will take if
I do not reach an agreement.
Without having a clear BATNA, I am negotiating in the dark. I
must have a clear knowledge of my options and alternatives, so as to
have a clear benchmark, against which, I can measure the proposed
solution. Otherwise I may find myself accepting an agreement that is
far worse than the one I might have gotten, or reject one that is far
better than I might otherwise achieve.
Example: If I am negotiating a new job offer, I need to compare
it to my current one, or if I am not employed, to the consequences of
a prolonged additional search.
82 So, to conclude: (a) A well prepared BATNA, allows me to
assess at all times my negotiating status; (b) The whole negotiation
process and its outcome, need to fulfill the basic requirement of
improving my situation relative to my BATNA.
Note: It is most logical that I will NOT know the BATNA of the
other side, as it is quite unreasonable for them to disclose their walk
away price to me!
83 Part III – Alternative Dispute Resolution (ADR) Chapter Ten – Mediation – Foundations
1. Introduction to “Third Party” and ADR Methods
a. If the parties cannot (or will not), be able to resolve their differences,
by the unilateral or bilateral methods, but still wish to do so, outside of
the Legal Courts of the land, they may utilize the good services of a
third party, or seek Alternative Dispute Resolution (ADR) options.
b. ADR, as used today8[1], refers to an array of dispute resolution
processes that are alternatives to traditional court litigation and trial
by judge or jury. The two most popular forms are arbitration and
mediation. Other models include processes like: mini-trial; early
neutral evaluation; moderated settlement conference; mediation-
arbitration (med-arb); neutral fact-finding, “rent-a-judge”; and
summary jury trial.
c. There are many cases, when the conflict, cannot be resolved by the
disputants themselves. A few examples: there is a big difference in the
power balance, or the personal skills of the two sides, creating a
disadvantage to one of them; distinct differences of culture and
language; very high-wired emotional and behavioral manifestations
not allowing for any focus on the issues; what ever you do, your
counterpart is not responsive or not cooperating with you directly. d. It must be clear, that step one, is the willingness of the parties to
these proceedings, their agreement on the choice of the person doing
the intervention (be it a skillful communicator or a professional
mediator), and their acceptance of the “rules of the game”.
8[1] Netzley, M. (2001). Alternative dispute resolution: A business (and) communication strategy 84 2. Mediation:
a. When differing parties are involved in a dispute, it is beneficial and
most effective when the conflict is handled immediately. If the two
disputing parties have tried to resolve the issue on their own but for
various reasons were not able to reach a resolution, a mediator may be
useful and most effective. One-way of handling a dispute is to bring in
a third-party we call mediator. Mediation opens channels of communication, gathers intelligence, increases the likelihood of a
peaceful resolution to a crisis situation and produces options for the
resolution. b. We will try to highlight the following points: (a) What is mediation? (b)
Why Mediation Works. (c) Benefits of Mediation. (d) Enforcing
Agreements Made at Mediation. (e) Important Attributes of the Mediator.
3. What is Mediation?
a. Mediation is an informal process in which a neutral third-party assists
the disputing parties in exploring issues in the case. The role of the
mediator is to facilitate discussion between the parties and guide them
in finding creative, mutually acceptable, and resolution of disputes. It
encourages collaboration of both parties to work together.
b. The mediator does not control the outcome. Moreover, the process of
mediation is: Impartial, neutral, balanced and safe. Therefore, the
mediator’s responsibility is to assist each party equally and cannot favor
the interests of any one party over another, nor any particular result in
the mediation. Solutions cannot result from coercion or intimidation
and mediators help ensure that parties reach agreements in a
voluntarily informed manner. c. The process of mediation is not guarded by formal rules and
regulations. The participation of the disputing parties is voluntary and
mediation process is non-binding. The mediator has no power to render
a decision or to force the parties to accept a settlement.
85 d. Furthermore, a mediation session is confidential and private. Anything
discussed during the mediation and any documents presented for the
mediation cannot be used by any party outside of the mediation
process, or in litigation or trial. This minimizes fears that what has been
said may be used against them outside of the mediation. Confidentiality
creates a safe environment that enables parties to share openly.
e. A mediation session often begins with a joint meeting involving the
mediator, the parties in dispute, their attorneys, and perhaps
specialists that may help both parties and mediator obtain necessary
information pertinent to the issue. (Involving attorneys and/or
specialists depends on the seriousness of the issue and relationship of
the parties.) Beyond the joint meeting, the mediator will sometimes
separate the parties and begin meeting with them in a sequence of
private, confidential meetings called “caucuses”. In these caucuses, the
mediator works with each of the parties to examine their case and
develop options for resolution. 4. Why Mediation Works
a. According to the American Arbitration Association, over 85% of all
mediations result in a settlement. There are numerous reasons why
mediation works even when the parties have been unable to settle the
case themselves. b. Negotiations between parties or their attorneys may never take place
without the assistance of a mediator because they fear that working
together towards a reasonable settlement offer will be misunderstood
as being “weak”. Hence, mediation provides a safe environment for
negotiation because the mediator can control and direct the
communications. c. Parties involved in conflict may lack negotiation skills. The mediator
can help relieve this through his involvement in finding out more about
the issue. The mediator can keep the parties focused on exploring
productive avenues to settlement.
86 d. Mediation provides the opportunity for all parties to meet for the
purpose of discussing settlement. All decision-makers necessary to
resolve a problem are usually present. Since the sole purpose of the
meeting is to find a resolution, these decision makers can focus on
reaching a settlement at once. e. Information is presented in an organized fashion. The mediation
session normally provides each side with a more realistic view of the
opposing position. f. Mediation allows each side to test settlement proposals by privately
conveying it to the mediator during a caucus. This allows each side to
fully explore settlement options without negotiating against each
other. g. Mediation offers a more realistic look at their case and what results
they are likely to achieve in court or arbitration. As this happens, their
positions on settlement become more reasonable and flexible.
h. Mediation assists the parties in developing options for settlement. The
mediator can assist the parties to clearly see their objective and to
consider alternative solutions.
5. Benefits of Mediation
a. There are many advantages of using mediation when utilized early on
in the dispute. Listed below are some of the advantages:
b. Disputing parties are able to find creative and mutually acceptable
resolutions in a controlled environment. c. Working together to solve problems leads to improved long-term
relationships and better work productivity. In return, the organization will spend less time searching for new employees and
turnover rates of employees will be substantially lower. d. It can prevent conflict from escalating into more serious disputes.
e. Mediation promotes principles and practices of trust that facilitate
communication and healthy working relationships. f. Early mediation can be most cost effective for the settlement of the
issues, relative to litigation or long-term fighting. For instance, 87 litigation expends far more time, energy, and money. A suitably planned
mediation experience can be pursued with less delay, and far less
momentary expense than any other remedy. g. Since the mediator does not control the outcome, mediation is low-risk.
The parties have control and predictability over the outcome of their
dispute. h. Since mediation is voluntary, nothing occurs without the consent of both
parties. It retains a high degree of control for the parties involved.
i. The mediation process is confidential and cannot be used as evidence
outside of the matter.
j. Settlements are more rapid compared to litigation where it may take
as long as a year to get a court date, have the case appealed, and
actually try.
6. Enforcing Agreements Made at Mediation
a. After a lengthy mediation and long bargaining, how should you
memorialize your agreement to assure that its terms will be enforced?
Frequently parties involved in mediation often question how to create
and enforce a binding agreement.
b. Here are steps to take in order to enforce agreements made in
mediation:
• Everyone whose authority is necessary in order to settle the 88 7. Important Attributes of the Mediator
a. When using a mediator it is important to use one that possesses the
right qualities to make the mediation process effective.
b. Some important attributes of a mediator are:
• Must be patient but persistent. • Must think quickly on their feet, show creativity, display
intuition, and have active listening skills.
• Establishes a sense of trust between the two parties. 8. Mediation Summary
a. Although mediation works for the most part, there are times when it
does not. Some problems in mediation arise when there is a lack of
settlement authority where the necessary party(ies) do not attend the
sessions. The lack of preparation on the part of the mediator also
reduces the effectiveness of mediation. Furthermore, bias on the part of
the mediator where one side or solution is favored causes serious b. In order to have a successful mediation process, it is not enough to
merely want to settle a dispute. A successful mediation requires
commitment on both parties and a skillful and neutral mediator. If all
parties and counsel commit to resolving the dispute, there will be a
settlement. Without the parties’ participation mediation cannot evolve
into a resolution. When all the elements are present, mediation is
beneficial and effective. 89 Chapter Eleven – Mediation – Practicum
1. Introduction
In the course of our professional life, we may need to resort to ADR
measures. At times, as one of the disputants, and at times we may be required to
serve as a mediator for others. Therefore, it is important to be knowledgeable
about the: “what is”, “how to” and “what to expect” from the process.
Many private and professional organizations, may seek the services of special
Mediation Service Firms (MSF), who specialize in rendering ADR services, in a wide
scope of dispute fields: family, organizational, commercial, breaches of contract etc.
with local and international issues and parties involved. But there is a common
thread, between them all, as to the principles and requirements of the mediation
process and the mediator’s role in it. I have found the USAF ADR Policy 2002, to be
quite straightforward, clear and pertinent to our needs. Therefore, this module is
based (with local and personal adjustments), on this policy. We will describe and
follow the: process, procedures, techniques and best practices for utilizing
mediation as an alternative dispute resolution (ADR) tool in civilian workplace
disputes. These techniques are helpful and appropriate in dealing with a variety of
grievances or complaints, the sources of which may be administrative or personal.
We will provide some practical advice and tips, to successfully mediate
common workplace disputes, going through the mediation process, step by step,
from Pre-Mediation, to Discussions, to Closure.
An ADR procedure is defined as one in which “a neutral is appointed and
specified parties participate.” Mediation is just one of the many types of ADR
techniques and is defined as: “A structured process in which the parties seek the
assistance of a qualified mediator to help them in resolving their issue in
controversy.”
For the sake of this module, the fundamental principle underlying the
mediation process is self-determination. i.e. the parties must be free to craft a
mutually acceptable resolution to their dispute. The role of the mediator is to
facilitate a resolution of the dispute through the use of the mediation process,
90 focusing on interest based techniques; the mediator will not decide the case or
dictate the terms of a settlement.
Therefore, the three fundamental elements of mediation can be summarized
as: • The parties agree to use a neutral / mediator to resolve their
dispute. • A qualified mediator is chosen to assist the parties, using
facilitative, interest-based negotiation techniques to resolve
their dispute, meeting with both sides jointly and/or separately.
• The process may reach its conclusion, with or without a
settlement.
2. Mediation and Mediator’s Standards
2.1 Mediator responsibilities
The mediators are responsible for ensuring that:
• All parties understand the mediation process, the role of the
mediator, the relationship between the parties and the
mediator, and that the agreement to mediate is voluntary;
• All appropriate steps are taken to prepare for the mediation;
• The mediation services are provided promptly and conducted
properly by a qualified mediator;
• It is of course obvious, that mediators will vary in their
personalities, and each will have his own unique style, in the
implementation of the process.
2.2 Mediator Standards
As described before, the intent of Mediation, is to assist the parties in
arriving at their own settlement. Some mediators will prefer individual and separate
meetings (caucus) with the each party, while others will rely exclusively on the joint
session. We will of course see all the possible combinations between these two ends
of the continuum. Regardless of style, and the issue at hand, a very clear and
91 definitive standard must be set, for mediators to follow, so that the procedures will
be conducted fairly and professionally.
Self-Determination – A Mediator shall recognize that mediation is based on
the principle of Self-Determination by the parties. Self-determination, or voluntary
decision-making and agreements between parties, is the fundamental principle of
mediation. It requires that the mediation process rely upon the ability of the parties
to reach a voluntary agreement. The following limitations must be kept in mind:
• The mediator should provide information about the process,
raise issues, and help parties explore options, but not dictate
settlement terms. The primary role of the mediator is to
facilitate a voluntary resolution to a dispute.
• The mediator should not offer a recommendation whether a
party should accept a particular agreement. The mediator can
never attempt to force or pressure any or both parties into
settling. However, the mediator should give the parties the
opportunity to consider all proposed options.
Impartiality – A mediator shall conduct the mediation in an impartial
manner. Mediator impartiality is central to the continued success of the mediation
process. If at any time the mediator is unable to conduct the process impartially,
the mediator should withdraw. A mediator should avoid conduct that gives the
appearance of partiality toward either of the parties. When the parties have
confidence in the impartiality of the mediator, the quality of the mediation process
is enhanced. The mediator will mediate only those matters in which he can remain
impartial and evenhanded and act in a neutral manner.
Conflicts of Interest – A Mediator shall disclose all actual and potential
conflicts of interest reasonably known to the mediator. After disclosure, the
mediator shall decline to mediate unless all parties choose to retain the mediator. A
conflict of interest is a dealing, relationship, or interest in the controversy or its
outcome that may create bias or an impression of possible bias. The mediator has a
responsibility to disclose those matters which could impact, or be perceived to
impact, the neutral’s impartiality.
92 Confidentiality – A mediator shall adhere to the legal requirements and
maintain the reasonable expectations of the parties with regard to confidentiality.
Generally, oral or written communication prepared for the purposes of a mediation,
that is offered by a party to the mediator in confidence, is protected by law from
disclosure or use in a future proceeding. The importance of ensuring that
confidentiality is observed, has been specifically emphasized by Congress in the
Alternative Dispute Resolution Act of 1996. As the expectations of the parties
regarding confidentiality are important, the mediator should ensure the parties’
expectations are realistic and consistent with existing law, and inform them as to
what will remain confidential and what will not.
Quality of the Process – A mediator shall conduct the mediation fairly and
diligently, and should have the necessary qualifications to satisfy the reasonable
expectations of the parties. The mediator chosen will be acceptable to both parties,
to mediate the dispute. The mediator’s credentials and experience should be known
to the parties, so that both sides are satisfied that he or she is competent to
mediate effectively. A mediator shall work to ensure a quality process. A quality
process requires the mediator to be properly trained and to have a commitment to
diligence and procedural fairness. There should be adequate opportunity for each
party in the mediation to participate in the discussions. The parties decide when
and under what conditions they will reach an agreement. It is important to
emphasize, that the mediator can engage in “reality checking” (objective
assessment of the party’s positions, demands and expectations) with each party
during confidential caucuses, and help the parties agree on the words used to
embody their settlement agreement and can help assemble an agreement, but they
will not dictate settlement terms.
93 3. Pre-Mediation
For mediation to be successful, there are certain things, which must be
accomplished. It is vital that: (1) the parties to a mediation process make a
voluntary and informed choice about agreeing to mediate their dispute; and (2)
that the process is conducted fairly, impartially, and effectively.
Initial education of the parties, ensuring the dispute is amenable to
mediation, the time at which mediation is offered, and getting the parties to sign
the agreement to mediate are all accomplished during the Pre-Mediation stage.
It should be ensured that the following issues have been addressed prior to
the mediation proper:
• Ensuring the Dispute is Amenable to Mediation
• Educating the Parties
• Logistical Preparations for the Mediation
• Agreement To Mediate
• Getting the Right People to the Table
3.1 Ensuring the Dispute is Amenable to Mediation
Use of mediation is voluntary, but not all dispute cases can benefit from
mediation, so it is important to determine whether an issue is appropriate for
mediation. Some factors that indicate that mediation might be appropriate include:
• The parties are interested in seeking settlement of the dispute,
but personality conflicts or poor communication between the
parties or opposing counsel adversely affect settlement
negotiations. • A continuing relationship between the parties is important or
desirable.
• Traditional settlement negotiations have reached an impasse.
3.2 Educating the Parties
All parties agreeing to consider mediation must be given complete
information about the mediation process. Inadequate knowledge about the
94 mediation process will greatly hinder the credibility of the mediation process and
diminish its opportunity to resolve the dispute. The Mediation Service Firm (MSF) or
the mediator himself should ensure that the decision to mediate is an informed one.
This can be done either orally or in writing. The following points are a “must”, and
should be covered by the mediator, prior to the mediation itself:
• The mediation process and how it differs from other ADR
procedures, such as arbitration or grievance procedures, etc.,
must be understood. Remind the parties that mediation, and
any resulting settlement, depends on the voluntary agreement
of the parties. The parties cannot be forced to settle on terms
unacceptable to them.
• Ascertain that the parties understand what a caucus is and why
it makes mediation a powerful dispute resolution process.
Explain why confidentiality and impartiality are keys to the
success of mediation.
• The interested parties should be informed about how a case is
scheduled; whom they can bring with them to the table;
assignment of a mediator; and what happens if there is no
agreement.
3.3 Logistical preparations for the Mediation
Once the foregoing notifications are made to all parties involved, the MSF or
mediator, will proceed to work out the logistics of finding a mutually acceptable
time, place, and date to hold the mediation.
Special attention should be paid to the following:
• Availability of a caucus room
• Access to telephones
• Access to a computer and printer to assist in the drafting of a
settlement agreement. • Consideration of the special needs of the parties, such as
disability access, or if premises require entry passes or
clearance.
95 3.4 Agreement to Mediate
It is wise to confirm the parties’ agreement to mediate their dispute in
writing. A signed letter will suffice. This letter should state the time, place, and
likely duration of the mediation session. It is advisable to add to the agreement
paper a short outline of what the parties should expect from the mediation process,
the confidentiality aspects etc.
3.5 Getting the Right People to the Table
It has been found, that a major delaying factor in most mediations, is the
absence of key or supporting figures, at the table. Therefore, the mediator should
encourage the parties to decide who they want to be at the table as well as the
other people that should be standing by or be available by phone to answer
questions that may arise during the mediation. These determinations are often
based upon the nature of the complaint/grievance, issues involved, and remedies
sought.
Note: in most labor disputes, there are times when one of the sides is
counseled by a professional labor organization or Union. It should be determined, if
a Union representative should be allowed to be present in the mediation
proceedings.
4. Mediation Process
Having covered the Pre-Mediation requirements, we enter the actual
mediation session. There are five elements to mediation:
• Mediator’s opening statement
• Parties opening statement
• Joint discussion
• Caucus
• Closure
4.1 Mediator’s Opening Statement
The opening statement is the verbal opening of the mediation by the
mediator. This is the mediator’s first contact in person with the parties together. It
is, therefore, an important part of the mediation process. Aside from setting the
96 ground rules for proceeding, the mediator will set the tone for the mediation as well
as have an opportunity to gain or lose credibility as a capable neutral.
The first thing a mediator should do in the opening statement is to identify
himself to the parties. This introduction not only includes the mediator’s identity,
but also the qualifications and experience of the mediator.
Another important part of the introduction is for the mediator to acknowledge
any acquaintances (should there be any), associated with the mediation and assert
his neutrality in the process.
It is imperative that during the opening statement the mediator establishes
the ground rules for the mediation. This includes not only explaining the process,
but also laying out the mediator’s expectations and rules for the parties. Of
particular importance is the need for the mediator to review the confidentiality of
the process, and ensure the parties understand what can and cannot be held in
confidence.
4.2 Parties Opening Statement
Each party has the opportunity to present an opening statement. Usually the
moving party, the Complainant, goes first. The mediator should allow the party to
fully explain his position. This may be the first time that each party hears the other
party’s view on the issues. Because of this, the mediator should allow each party to
fully explain his position even if the party becomes emotional. Furthermore, venting
by the parties can be the first step in putting the dispute behind them and moving
toward resolution.
It is also very important that the mediator listen very closely during the
opening statements, paying careful attention to the issues as articulated by the
parties. Many times the issues defined by the parties in the opening statement are
different from those articulated in the complaint or answer.
Mediators can also learn from a party’s opening statement the hidden
concerns or interests of the parties and sometimes can even discover the real
source of the problem. This type of information is invaluable later when getting the
parties to focus on interests instead of positions.
The opening statement of the parties can also allow mediators to note how
far apart the parties are at the outset. This will give the mediator an initial view of
97 the challenge ahead as well as assist him in determining when and if caucuses
should be utilized. Of course, the attitudes of the parties and the ability of each
party to articulate their positions will also be evident. This information will assist
the mediator in determining who may be in need of caucuses more often and how
much the mediator will need to assist the parties in understanding the other party’s
views on the issues.
4.3 Joint Discussion
Joint discussion is the first opportunity for the parties and the mediator to
interact. The mediator should start the joint discussion by summarizing the parties’
opening statements. Clarifying questions should then be asked of each party so the
issues can be properly identified. Moreover, this is an opportunity to begin assisting
the parties in focusing less on their positions and more on their interests. Careful
observation is required, though. Caucus may be the more appropriate forum for
more sensitive parties or sensitive interests.
The mediator may allow the parties to ask questions and discuss the issues
more with each other rather than the mediator.
If the parties are unable to communicate with each other, the mediator
should continue to serve as the buffer between the two.
If joint discussion breaks down, or issues arise which are sensitive or which
might be confidential, the joint discussion should be suspended and the mediator
should move to a caucus with each party.
4.4 Caucus with the Parties
A caucus is a private meeting between the mediator and the party. Virtually
everything discussed in caucus, which was not previously disclosed either before or
during the mediation, IS CONFIDENTIAL. Unless the party explicitly grants the
mediator permission to discuss some or all of what is discussed in caucus, the
mediator must not reveal the information to the other party either in caucus or joint
discussion.
When the mediator holds caucuses with a party, the mediator should explain
the rules on confidentiality before starting the sessions. To avoid confusion, the
mediator should verify, at the end of each private session, what information the
98 party wishes to keep confidential and what information may be disclosed to the
other party. A party is free to reveal its own communications offered in caucus.
Caucuses may be called when the parties need to cool off and refocus, when
confidential information needs to be discussed in a protected setting, when options
for settlement need to be explored in a secure setting, or when a party needs to
save face in front of the other party.
In caucus a mediator can accomplish a number of things beyond getting
additional information, which the party may not feel comfortable discussing in open
session, such as disclosure of possible compromises. While the mediator cannot
disclose this information without the express permission of the party, the
information may nevertheless be invaluable in assisting the parties, to reach
interests as opposed to positions, thus moving them toward settlement.
In caucus, the mediator also has an opportunity to cultivate a relationship
with each party. While it is imperative that the mediator maintains impartiality, it is
almost as important that the party has faith in the mediator as well as the process
as a whole.
One of the most important tools that can be employed in a caucus is the
reality check.
4.5 Closure
At some point, after using joint sessions and caucuses, the mediation process
will come to a close. This can occur in one of two ways:
• Without agreement/settlement
• With agreement/settlement, either partial or in full.
When settlement no longer seems possible, i.e. there is no more movement
by the parties on any of the issues and the parties and the mediator have
seemingly exhausted all available mediation tools, or one or both parties have
removed themselves from the mediation, the mediation should end.
In most cases the mediation session will close with at least some of the
issues resolved. Once a specific issue has a specific solution proposed, and the
mediator worked through the proposal with the parties to see if it is indeed
satisfactory to the parties, it should be reduced to writing by the mediator,
reviewed, and then signed by the parties.
99 5. The Preferred Negotiation Style – Principled Negotiations
Mediation is a form of negotiation between two parties where a third party
neutral assists or facilitates a settlement, which is amenable to, and voluntarily
accepted by, both parties. The style of negotiation best suited for mediations is
called Principled Negotiation, or Interest Based Negotiations (IBN).
In essence, the theory behind this approach, is that a win-win solution to the
dispute, allowing both parties to have their interests met by the same settlement, is
possible. This concept has been described as “expanding the pie.” However, most
parties naturally engage in Position Based Negotiation (PBN), where each party’s
gain is in proportion to the other party’s loss, and not IBN. This style has been
referred to as a “fixed pie” concept.
A skillful mediator will guide the two parties, towards an interest-based
negotiation, and not entrench in positional bargaining.
IBN is a preferred negotiation style in the mediation context because, in most
instances, there will be a continuing relationship between the parties; an
agreement satisfactory to both parties is desirable; and, for mediation to survive as
a litigation alternative in the workplace, the process must be satisfying to both
parties. 6. Dealing with Impasse
6.1 Pressing past Impasse
At times, discussions may reach an impasse or stalemate. It brings the
mediation session to a standstill, and a skillful mediator can utilize several tools to
move the bogged down negotiation wagon. Two such tools that can assist in getting
past impasse, are:
6.1.1 Reality Checking – Reality checking can be a critically important
part of mediation and is most properly done in the caucus setting. Reality checking
is the process by which the mediator gets the party to understand, through a series
of questions, the weaknesses of their case, issue, or demand. If a party has no
case, a very weak case, no claim for what they seek, no legal basis for the
settlement they desire, or an unrealistic demand of the other party, reality checking
100 may be necessary. Reality checking is accomplished through questioning the party
regarding its claim, defense, demand, etc. Of course, the mediator should do
nothing in this process, which might compromise his impartiality and neutrality. Nor
should the mediator render an opinion.
6.1.2 BATNA and WATNA – A great technique to use with parties who
wish to leave the table or are unwilling to work towards settlement is to discuss
with them their Best Alternative To Negotiated Agreement (BATNA) and their Worst
Alternative To Negotiated Agreement (WATNA). Recognizing a party’s BATNA is
important because many times, that party’s BATNA will not be a desirable option.
Similarly, getting a party to contemplate the probability and gravity of the worst-
case scenario can often have the effect of compelling the party back to the table, or
to be more amenable to settlement.
6.2 The Value of Venting
While emotions might make some parties or mediators uncomfortable, they
are important to recognize. Often acknowledging emotions and allowing a party or
parties to vent is the key to resolution. It is important for the parties to have the
opportunity to be heard by each other and to be able to speak plainly and honestly
about their feelings.
The mediator should allow the parties to vent their emotions and frustrations
to the greatest extent possible.
Of all the parties present, the mediator’s responsibility, is to remain calm and
maintain the quality of the proceedings.
7. Settlement
The goal of a mediation session is for the parties to agree on a resolution of
their dispute. It is therefore up to the parties, not the mediator, to decide on a
resolution. The settlement agreement should be memorialized in writing and reflect
the terms and conditions agreed upon by the parties. Mediators should draft a
written full (or partial) settlement agreement, to be signed by the parties, and
ideally, this should be done prior to departing the mediation session.
101 Assisting the parties in crafting a quality settlement agreement is one of the
most important services a mediator can and should perform. The following
guidance, can assist the mediator in this endeavor:
7.1 Have the Approving Authorities Available – Prior, throughout and
most important on closure, the mediator should ensure that the parties present
have the ability and authority to agree to particular terms in a settlement
agreement. During the mediation session, either party is free to consult with
lawyers or their experts to ensure terms and conditions to a settlement are legal
and that the party has authority to agree to them.
7.2 Terms of the Agreement – Who, What, Where, and When – If a
settlement agreement is ambiguous, then a party may allege a breach to the
agreement. A “best practice” is for the mediator to review the settlement
agreement, and clearly state: “who does what, when, and where?” The more
precise the wording, the more defined the timetable for implementation, the less
“loop holes” will be found.
7.3 Objective Standards Indicating Compliance with the
Agreement – The agreement should contain objective standards so that each party
can be sure that its stipulations are being followed. The use of terms such as “good
faith,” “best efforts,” or “reasonable” are often necessary and desirable, but, such
terms alone can be ambiguous and can lead to future problems. If possible, the
mediator should urge the parties to include specific time frames within which to
fulfill clear obligations.
7.4 Settlement Agreement Enforcement – Agreements reached as
the result of a mediation session are binding to the same extent any settlement
agreement is binding on the parties, as are the procedures to enforce such
agreements. In other words, it is legal and binding as any other contract and
agreement, signed by the parties.
102 Chapter Twelve – Arbitration – Foundations
1. Alternative Dispute Resolution
a. If the parties cannot (or will not), be able to resolve their differences, by the unilateral or bilateral methods, but still wish to do so, outside
of the Legal Courts of the land, they may utilize the good services of
a third party, or seek alternative dispute resolution (ADR) options.
b. ADR, as used today9[1], refers to an array of dispute resolution
processes that are alternatives to traditional court litigation and trial disputants themselves. A few examples: there is a big difference in
the power balance, or the personal skills of the two sides, creating a
disadvantage to one of them; distinct differences of culture and 2. Arbitration – Introduction
a. In arbitration, both sides agree to present their respective cases, to
an agreed neutral arbitrator for a decision. The key word being –
Decision. Arbitration may be binding or non-binding (advisory). The
parties agree in advance that the decision (award) of the neutral is to
9[1] Netzley, M. (2001). Alternative dispute resolution: A business (and) communication strategy Business 103 be final. If the two sides cannot reach an agreed solution, the
arbitrator has the authority to pass judgment and render a binding
solution. Generally, there are no appeals from an arbitrator’s award, b. Arbitration may be:
• Court-Ordered – in many cases the court may suggest or
rule that the parties attempt to overcome their differences
by submitting their dispute to arbitration.
• Mandatory – it is common in work agreements and in commercial trade contracts, to insert a clause that both
sides, in event of a future dispute, agree to arbitrate.
• Voluntary – Voluntary arbitration refers to the arbitration
of a dispute submitted to an arbitrator by agreement of
the parties. Of course this implies that we need a
consensual acceptance. The main reason and consideration
for a voluntary choice to arbitrate, will be to minimize the
expense, delay, or publicity which they perceive will
accompany litigation. c. In all of the above, the parties must enter into an agreement to
arbitrate or a submission agreement, prior to launching the process.
3. Who Uses Alternative Dispute Resolution?
a. Wherever we find conflicts, be they of a: personal, organizational,
community, national and international sort, we will see that ADR
methods will be suggested, and if found useful – implemented.
b. The American Arbitration Association, prides itself with dealing with
hundreds of thousands of dispute cases, in the areas of: business,
insurance, labor relations, environment, public policy, family,
securities, technology, employment, international trade, and many
more.
104 c. Two major areas that we may observe preference for ADR methods
are: • International Commerce – many firms incorporate
arbitration clauses in their contracts to avoid litigating in a
foreign court. As proceedings are informal, we can use
translators and local resident foreign nationals, to present
the case, conduct video conferencing, all of which are
oriented to expedite procedures. • Labor-Management disputes – this is a major area where
we may see the Mandatory option of arbitration. Whereas
many organizations, imbed within their employment
contracts, provisions calling for the arbitration of
grievances that cannot be settled, within the “normal”
workplace hierarchy. The disputes arbitrated are most
common in the areas of: disciplinary actions, termination, promotion and demotion decisions, tenure, and pensions
and benefits of retired personnel.
4. Benefits of Arbitration
a. In general, most people wish to avoid the lengthy and costly
procedures of lawsuits and Litigation. It is true to say, that litigation
like war, is something you know how you enter, but never know how
you come out of, in the end. In addition to the ever-growing costs
accrued overtime, in lower courts and higher-level courts of appeal,
we suffer from stress related consequences, and in many cases, what was a simple and private matter, becomes an item of gossip and
unwanted publicity. In a nutshell, Arbitration is: faster, cheaper and
final. b. The AAA summarizes the following benefits and advantages of
arbitration: • Speed: Despite the best efforts of our court systems to
improve processing time of civil disputes, the burdens of
criminal cases, tight budgets, and other factors still create
105 delays of years to bring a case to court in many
jurisdictions. Appeals extend the time required to reach a
final result still further. In ADR there is no “docket” – no
line in which to wait for your day in court. The only
elements governing speed are the eagerness of the
parties to end the dispute and the complexity of the cases
to be resolved.
• Choice and expertise of impartial neutrals: Parties who
resolve their disputes through ADR enjoy the assistance
of neutrals who are already expert in the subject matter
of their disputes. For example, parties to a construction
industry dispute might select an architect, a contractor,
or a lawyer with a lifelong practice in construction law to
serve as their mediator or arbitrator. The “subject matter
expertise” of the neutral reduces the time typically
required to attempt to educate a judge or jury about the
technical elements of a dispute, and raises the confidence level of the parties, that the result of the process will be
well informed.
• Informality and Flexibility: Alternative dispute resolution
is conducted in a manner that is more businesslike than
litigation. Each party tells its side of the story to the
arbitrator in an atmosphere that is less formal than a
court proceeding. Since the parties control the process,
they enjoy tremendous flexibility. Hearings might take
place at the site of the dispute or during evening hours.
Testimony might be taken by telephone. • Privacy: Arbitration, Mediation and other forms of ADR
are not open to public scrutiny like disputes settled in
court. The hearings and awards are kept private and
confidential, which helps to preserve positive working
relationships. 106 • Economy: Time saved is money saved. ADR processes are designed to be faster, more streamlined, and more
informal than litigation. Many of the costly procedures
associated with formal court processes, such as filing
appeals, and motions can be eliminated.
5. Disadvantages of Arbitration
a. In the name of academic fairness, we need to point out, that no
process and/or procedure is immune of mistakes. Timothy S. Bland
(an attorney in the Memphis, Tennessee, office of Ford & Hannison
LLP, a national law firm exclusively representing management in labor
and employment matters), presents 10[3] some disadvantages that
may surface when arbitration is used.
b. He says: “Arbitration does have disadvantages. The simpler form of
settlement can increase the number of grievances filed, decisions can
sometimes be unjust, and the defense may be less vigorous. Also,
companies can face a problem if employees refuse to participate in
the arbitration process”:
• More cases: When an employer makes it easier for
employees to bring cases by using arbitration in lieu of
litigation, the result might be a greater number of cases.
However, several arbitration cases may still cost less than
one trial, making the trade-off worthwhile. Also, such
trends might reverse when employees see that baseless
allegations do not result in awards of damages.
• Unfair verdicts: Arbitrators have an interest in keeping
parties as satisfied as possible so that the arbitrator will
be used again in the future. That sometimes leads to
decisions where the arbitrator splits the difference,
offering a compromise. However, this type of decision
does not always lead to the fairest outcome.
10[3] What’s the verdict on arbitration? Security Management; Arlington; Jan 2002;
107 • Weaker defenses: An arbitrator is not a judge and does
not necessarily have the same experience, training, or
expertise that one finds on the bench. Nor is an arbitrator
obliged to strictly follow the rules of evidence and civil
procedure. Therefore, a technical legal defense may not
be as persuasive as it would be in court. Because an
arbitrator’s decision is generally final, the arbitrator does
not have the same concern that a judge would have that
a decision will be overruled on appeal. Thus, if an
arbitrator ignores a meritorious legal defense, there is
generally little recourse for the employer.
• Employee dissatisfaction. Some employees will not agree
to work for a company if it has a mandatory arbitration
procedure that prohibits the employee from bringing suit
in court. However, most employees probably believe that
they will never need to use such a system anyway, much
less sue in court. Additionally, when the employer’s
system of dispute resolution is a fair one, an employee
who has no axe to grind should not balk at agreeing to be
bound by it.
• Requirements: A company’s arbitration agreement
generally covers how an arbitrator will be chosen, what
can be arbitrated, and how much time is allowed for
filing. Even though the Supreme Court has held that
arbitration agreements may be enforceable in the
employment context, there are a number of requirements
that such agreements must meet to be valid and
enforceable. An employee must be informed about the
arbitration program, and the program must be voluntary.
Employers must be aware of the statutory remedies
available to employees, and the arbitration process must
be fair.
108 • Notice: An employee may be forced to arbitrate a claim
only if the employee knowingly agrees to submit such a
claim to arbitration.
• Choice: An agreement to take a job subject to a
mandatory arbitration agreement generally satisfies the
voluntariness requirement. However, asking employees to
sign arbitration agreements after they are already
employed can present problems.
• Options: Employers often seek to structure arbitration
clauses such that employees effectively waive the
substantial procedural rights of litigation. For example,
some companies require employees to sign an agreement
prohibiting an arbitrator from awarding punitive damages.
Some courts enforce such agreements; others do not.
• Fairness: If an arbitration process is to withstand judicial
scrutiny, it must be fair. Arbitration agreements that offer
few remedies and establish restrictive rules that unduly
limit the time frame in which a claim can be filed, for
example, run the risk of being ruled unconscionable.
Among the factors that indicate fairness in an arbitration
agreement are the following: a reasonable procedure for
selection of neutral arbitrators, pre-hearing discovery
rights, and rules that permit the parties to have
representation of their choosing.
6. The Neutral’s Qualifications and Qualities
a. As in mediation, arbitrators selected for this task, should posses
certain essential qualities. The more proficient the arbitrator is in
conducting these hearings, the more knowledgeable of the statutory
issues of the dispute, and the more he is familiar with common
and/or specific workplace formal and informal structure and relations,
the easier it will be for him to “jump into the water”. Furthermore, it
109 provides for a higher level of confidence on the part of the parties, b. Of all qualities, it is obvious, that the arbitrator should be first and
foremost, objective and independent of bias toward either party.
c. Other qualities of importance (emphasis on the business arena):
• Dispute management skills 7. Arbitration and the Law
a. Arbitration is most attractive in its finality, and being legally binding
and enforceable in most jurisdictions. Arbitration agreements and
awards, are enforced by the “The Federal Arbitration Act”, in
interstate-commerce and international contracts.
b. Therefore we will see a growing usage and inclusion of an arbitration
clause in a commercial or employment contract / agreement between
the parties.
c. The Federal Arbitration Act (9 U.S.C. §§ 1 et seq.) governs arbitration
agreements made in interstate commerce. Generally speaking, it
provides that such agreements are enforceable and that federal
courts must compel parties to participate in arbitration upon motion
made by any party. 11[4]
d. The Federal Arbitration Act further provides that an agreement to
arbitrate is subject to all of the same defenses that may be raised to
any contract. The federal courts have, over the years, construed this
provision narrowly so as to favor arbitration.
e. Many states have their own arbitration statutes, and in a majority of
the jurisdictions in the United States, these statutes are modeled
after the Uniform Arbitration Act. Most every state’s enactment
11[4] Items c-g are based on Hieros Gamos © 1985/2002
110 requires that courts compel arbitration upon the motion of any party,
much like the Federal Arbitration Act.
f. An arbitration agreement is unenforceable if there is not a
prominently displayed “acknowledgement of arbitration” to assure
that both parties fully understood that the agreement contained an
arbitration clause.
g. There are several international protocols governing arbitration
agreements and one who prepares an arbitration clause for inclusion
in an international agreement should be certain to determine whether
there is a treaty or convention which would pertain to the
enforcement of the arbitration clause.
8. Please review the: Alternative Dispute Resolution Act (ADRA) 1996 – see
Appendix F.
111 http://members.cox.net/mshachar/MED_ARB/ADRA%201996%20-%20Article.htm Chapter Thirteen – Arbitration – Practicum
Introduction In the course of our professional life, we may need to resort to ADR measures.
Therefore, it is important to be knowledgeable about the: “what is”, “how to” and
“what to expect” from the process.
Many private and professional organizations, may seek the services of special Arbitration Service Firms (ASF), who specialize in rendering ADR services, in a wide
scope of dispute fields: family, organizational, commercial, breaches of contract etc. with local / international issues and parties involved. But there is a common
thread, between them all, as to the principles and requirements of the arbitration
process and the neutrals role in it.
In the business world, we will eventually enter into contractual agreements with
suppliers and clients on one hand, and will negotiate and sign employment
contracts for ourselves or with our employees.
In this module:
• We will present – The differences between arbitration and litigation.
• We will follow the basic steps of arbitration, from its insertion as a
clause within the contract, to the practical session itself, and its
outcome. • Briefly point a finger on the special considerations of International
arbitration cases.
The differences between arbitration and litigation. Before we actually commit ourselves into the ADR process, it would be beneficial to
consider the major points 12[1] of how arbitration differs from litigation in a court
of law.
12[1] Based on the points in: Use of Arbitration Clauses in Commercial Agreement. By Gary H. Barnes Downs 112 Point Arbitration Litigation technical pleading Motion practices associated with Filing fees Arbitration filing fees can be Fees are normally a percentage of the Arbitrator Arbitrators must usually be Litigants are not concerned with Hearing The parties may need to There is no charge for the use of the Pre-Trial Few arbitration rules provide Most every jurisdiction permits Scheduling Arbitration hearings are Courts schedule matters without 113 take place and are Privacy Arbitration can be conducted Litigation is open to the public and Conduct of Usually affidavits are Courts typically use formal rules of Decision The parties may dictate the In jury trials, the decision is apt to Appeal There is no automatic In most every jurisdiction, every party 114 The Arbitration Process – Basic Steps 13[2]
1. Step One – The Agreement to Arbitrate and Locale
a. The most important step in initiating arbitration is the agreement to
arbitrate. This agreement can be of one of two kinds: it can take
the form of a future-dispute arbitration clause in a contract or,
where the parties did not provide in advance for arbitration, it can
take the form of a submission of an existing dispute to arbitration.
b. The parties can provide for the arbitration of future disputes by
inserting a clause into their contracts. Example: Any controversy or
claim arising out of or relating to this contract, or the breach
thereof, shall be settled by arbitration administered by the …and
judgment on the award rendered by the arbitrator(s) may be
entered in any court having jurisdiction thereof.
c. Arbitration of existing disputes may be accomplished by the use of
the following example: We, the undersigned parties, hereby agree
to submit to arbitration administered by …the following
controversy: (cite briefly). We further agree that the above
controversy be submitted to (one)(three) arbitrator(s). We further
agree that we will faithfully observe this agreement and the rules,
that we will abide by and perform any award rendered by the
arbitrator(s), and that a judgment of the court having jurisdiction
may be entered on the award.
d. Locale – Special attention is sometimes required to determine in
which country, state and city hearings are to take place (If the
place of arbitration has not been designated in the contract). The
parties (and without their agreement – the arbitrator), should take
into account the following factors:
• Locations of the: parties, witnesses, documents and sites
or the place of materials.
13[2] Based on the points in: AAA 2002 – A Guide to Mediation and Arbitration for Business People
115 • Relative costs to the parties,
• The place of performance of the contract,
• Laws applicable to the contract,
• Places of previous court actions, if any,
• Any other reasonable arguments that might affect the
locale determination.
2. Step Two – Selection of the Arbitrator
a. It is most common to find in contracts, the pre determined body of
which the arbitrator will be chosen from. Example: in the
construction business – the national board of architects and
engineers. In the diamond industry – arbitrators are members of
the diamond bourse.
b. On the other hand, if the services of an ASF is called for, most of
them will have a roster of qualified arbitrators representing all fields
of specialization, industries, trades, or professions.
c. Unless the parties have indicated another method, the most ASFs
will select the arbitrator by:
• Sending each party a copy of the same specially prepared
list of proposed arbitrators to resolve the controversy. A
Biographical information sheet on each arbitrator
accompanies the list.
• The Parties are allowed reasonable time to study the list,
strike names to which they object, and number the
remaining names in the order of preference.
• The arbitrator will be chosen from the mutually agreed list
of preferences, and if not found will be appointed by the
ASF.
3. Step Three – Preparation for the Hearing
a. Scheduling – If an ASF is used, the case administrator/manager
consults all parties and arbitrators to determine a mutually
convenient day and time for the hearing. If the parties cannot
agree, the arbitrator is empowered to set dates.
116 b. Preliminary hearing – In large or complex cases, at the request of
any party or at the discretion of the arbitrator or the AAA, a
preliminary hearing with the parties and/or their representatives
and the arbitrator may be scheduled by the arbitrator to specify the
issues to be resolved, to stipulate uncontested facts, and to
consider other matters that will expedite the arbitration
proceedings. c. Postponements – a party may need to postpone a scheduled
hearing. When this is necessary, the party seeking postponement
should first attempt to contact its adversary to obtain its consent. If
agreed the arbitrator will be informed, for his approval. If consent is
not reached, the arbitrator will rule.
d. Preparations – Since the arbitrator will make the award on the basis
of the facts and exhibits presented at the hearing, it is essential
that the parties or their representatives prepare for arbitration
carefully:
• Assemble all documents and papers that you will need at
the hearing. Always make photocopies for the arbitrator
and the other party. If documents that are needed are in
the possession of the other party, ask that they be brought
to the arbitration.
• If it will be necessary for the arbitrator to visit a building
site or warehouse for an on-the-spot investigation, make
plans in advance. The arbitrator will have to be
accompanied by representatives of both parties.
• Prepare your witnesses. Make certain that each one is
alerted as to the possibility of appearing before the
arbitrator, and of course as to time and place.
• Be prepared to answer the opposition’s evidence.
• If a transcript or recording of the hearing is needed, the
parties are responsible for making the arrangements and
117 notifying the other parties of such arrangements in
advance of the hearing.
e. Representation – In most cases, a professional representative /
counsel, can represent the parties. Proper and prior notice should
be given.
4. Step Four – Presentation of the Case
a. Arbitration hearings are conducted somewhat like court trials,
except that arbitrations are less formal. Arbitrators are not required
to follow strict rules of evidence. They must hear all of the evidence
material to an issue but they may determine for themselves what is
relevant. Arbitrators are therefore inclined to accept evidence that
might not be allowed by judges. Note: Direct testimony of
witnesses is usually more persuasive than hearsay evidence, and
facts will be better established by documents and exhibits than by
argument only.
b. It is customary for the claimant to proceed first with its case,
followed by the respondent. Each party must try to convince the
arbitrator of the correctness of its position and no hearing is closed
until both have had a full opportunity to do so.
c. The claimant and the respondent need to present their cases to the
arbitrator in an orderly and logical manner. This includes:
• An opening statement that clearly but briefly describes the
controversy and indicates what is to be proved. Such a
statement lays the groundwork and helps the arbitrator
understand the relevance of testimony to be presented.
• A discussion of the remedy sought. This is important
because the arbitrator’s power is conferred by the
agreement of the parties. Each party should try to show
that the relief that it requests is within the arbitrator’s
authority to grant.
• Introduction of witnesses in a systematic order to clarify
the nature of the controversy and to identify documents
118 and exhibits. Cross-examination of witnesses is important,
but each party should plan to establish its case by its own
witnesses.
• A closing statement that should include a summary of the
evidence and arguments and a refutation of points made
by the opposition.
d. It is advisable, to adopt a cooperative attitude, to achieve effective
arbitration. Overemphasis or exaggeration, concealing of facts,
introduction of legal technicalities with the objective of delaying
proceedings, or, in general, disregard of ordinary rules of courtesy
and decorum can have an adverse effect on arbitrators.
e. After both sides have had an equal opportunity to present all of
their evidence, the arbitrator declares the hearing closed.
f. As determined beforehand, the arbitrator will render an award,
within the timeframe designated.
5. Step Five – The Award
a. The award is the decision of the arbitrator on the matters submitted
to him or her under the arbitration agreement. The purpose of the
award is to dispose of the controversy finally and conclusively. It is
made within the limits of the arbitration agreement and it rules on
each claim submitted. Arbitrators are not required to write opinions
explaining the reasons for their decisions.
b. The power of the arbitrator ends with the making of the award. An
award may not be changed by the arbitrator, once it is made,
unless the parties agree to restore the power of the arbitrator or
unless the law provides otherwise.
119 6. Step six – Fees and Compensation
a. Administrative fees – in most cases, the ASFs will request an
administrative fee for their services, based on the amount of the
claim or counterclaim.
b. Arbitrator compensation – in most cases, arbitrator compensation
and administrative fees are subject to allocation by the arbitrator in
the award, unless decided differently by the two parties.
Section four – International Cases
The globalization of many companies, and the continuous flow of business between
different countries, has made arbitration a unique tool, in facilitating conflicts and
dispute resolutions.
When dealing with a dispute between a supplier in the Far East, a client in the
Americas, and a European shipper between them, we have more than just different
legal systems, although most countries have international laws and treaties,
upholding inter-national arbitration clauses procedures and decisions.
Apart from the various legal aspects of arbitration, there are some important points
to be considered, to minimize expenses, and travel for all parties concerned:
• Locale or locations.
• Scheduling, and designating consecutive hearing days, as some
people will be traveling from overseas.
• Language of the hearings
• Usage of interpreters and translators.
International arbitration agreements, in a global market, with multi national and
cultural diversity, require special attention by the business parties, in the full cycle
of their business, in general. And in event of dispute, on the implementation of
arbitration as a conflict resolution option, in particular.
120 Appendix A
The Air Traffic Controllers’ (PATCO) Strike
On August 3, 1981 almost 13,000 air traffic controllers went on strike after
months of negotiations with the federal government. During the contract talks, the
Union’s three major demands as: a $10,000 across the board raise, a 32-hour
workweek (down from 40), and a better retirement package.
At that time President Reagan, faced a very difficult situation. On one hand,
there was no alternative to the air controllers, as the FAA was the sole civilian
recruiter and trainer of this profession (the military has its own program). And on
the other, there was a mighty pressure from all people and organizations that are
dependent on air travel.
America was brought to a standstill!
There is no one better than the President himself, in his own words, to
present the decision taken on August 3, 1981, and the reasoning behind it:
“This morning at 7 a.m. the union representing those who man America’s air
traffic control facilities called a strike. This was the culmination of 7 months of
negotiations between the Federal Aviation Administration and the union. At one
point in these negotiations agreement was reached and signed by both sides,
granting a $40 million increase in salaries and benefits… It was granted in
recognition of the difficulties inherent in the work these people perform. Now,
however, the union demands are 17 times what had been agreed to…This would
impose a tax burden on their fellow citizens which is unacceptable.
…I respect the right of workers in the private sector to strike…But we cannot
compare labor-management relations in the private sector with government.
Government cannot close down the assembly line. It has to provide without
interruption the protective services which are government’s reason for being…
It was in recognition of this that the Congress passed a law forbidding strikes
by government employees against the public safety.
…It is for this reason that I must tell those who fail to report for duty this
morning they are in violation of the law, and if they do not report for work within
48 hours, they have forfeited their jobs and will be terminated.”
121 The outcome – Over 11,000 participating controllers were fired (and these
individuals were thereafter ineligible for Federal employment). Most airports were
closed and the major ones were operated by the military, until new air controllers
were trained.
122 Appendix B
The People vs. Government – Economic Strife – Argentina (2002)
Back ground
All agree that there is a problem with Argentina’s economy. Although
Argentina has a relatively mature economy and society, it is struggling with many
severe economical problems, the most imminent being its huge debt problem.
The economy has been in recession for the past two years, investment is
falling and unemployment stands officially at 15 percent, with estimates that
around 50 percent of the workforce is underemployed. The two-year recession has
had a severe impact on government finances. Local governments are unable to pay
workers and pensioners while the federal government has been running deficits at
around 4 percent of gross domestic product. All of which has eroded per-capita-
income, back to 1960- era levels.
Investors have been increasingly reluctant to buy Argentine stocks and
bonds. The leading stock market index has fallen by 20 percent over the past few
months, while interest rates have reached as high as 21 percent.
There is more than a growing concern that Argentina cannot repay its $19.5
billion in loans, due in 2002.
Government actions
The overall economic program, undertaken by president De la Rua, is aimed
at winning approval from the International Monetary Fund for a standby loan of $20
billion to prevent Argentina from defaulting on next year’s debt.
The president foreshadowed a series of measures, including:
• Privatization of the social security system and cutting Social Security
benefits.
• Freezing federal and provincial budgets for five years.
• Cuts to the civil service.
123 Public Reaction
Growing numbers of unemployed workers, blocked roads and organized
protests for many months. High-tension protests turned into violent confrontations,
when Cordoba. Police violently assaulted a labor rally; six workers and six police
officers were wounded.
In November 2000 a General strike called, by three union federations in
Argentina virtually shut down the nation of 37 million inhabitants. The mass
walkout was a protest against the austerity measures of the De la Rua
administration.
Argentina’s industrial sector was totally paralyzed by the strike. Hundreds of
women took to the streets banging their pots and government employees occupied
the offices of the privatized Social Security system and blocked main roads in
Buenos Aires.
Civil unrest continued, and unfortunately all the pessimistic predictions as to
Argentina’s in ability to repay its debts, were materialized in the beginning of 2002.
124 Appendix C
Non-Homogenous Societies – “Quebec – A Distinct Society” The Quebec conflict, Has all the ingredients of a conflict originating from the
non-homogenous issue. But, unlike many other deeply emotional, aggressive and
sometimes bloody conflicts, the Quebec-Canada conflict, remains (apart from some
“minor” demonstrations and clashes) confined to democratic procedures. Allowing
us to examine how this conflict threatened the Canadian national cohesiveness and
unity.
To understand this conflict’s origin, one has to go back in time.
Canadian History – Highlights
• John Cabot sailing under English auspices, touched the east coast in
1497. In 1534, the Frenchman Jacques Cartier planted a cross on the
Gaspé Peninsula, setting the stage for French-English rivalry until
1763. The first permanent European settlement in Canada was
founded in 1605 at Port Royal, and a trading post was established in
Quebec in 1608. The English, moving to support their claims under
Cabot’s discoveries, attacked Port Royal (1614) and captured Quebec
(1629). The French regained Quebec (1632), and in 1663, the colony
was placed under the rule of a royal governor.
• The French did not go unchallenged. And the long series of wars
between Britain and France in Europe, were paralleled in North
America, culminating in the Treaty of Paris in 1763, where France
ceded all its North American possessions east of the Mississippi to
Britain.
• The French residents of Quebec strongly resented the Royal
Proclamation of 1763, which imposed British institutions on them,
some of its provisions, however, were reversed by the Quebec Act
(1774), which granted important concessions to the French.
• In the aftermath of the American Revolution 1776, many Loyalists
from the colonies in revolt fled to Canada and settled in large numbers
in Nova Scotia and Quebec. In 1784, the province of New Brunswick
125 was carved out of Nova Scotia for the loyalists. The result, in Quebec,
was sharp antagonism between the deeply rooted, Catholic French
Canadians and the newly arrived, Protestant British. To deal with the
problem the British passed the Constitutional Act (1791). It divided
Quebec into Upper Canada (present-day Ontario), predominantly
British and Protestant, and Lower Canada (present-day Quebec),
predominantly French and Catholic.
• Internal strife continues, until the British governor-general
recommended the union of Upper and Lower Canada under responsible
government. The two Canadas were made one province by the Act of
Union (1841) and became known as Canada West and Canada East.
• The movement for federation of all the Canadian provinces was given
impetus in the 1860s due (among other reasons), to find a solution to
the problem posed by Canada West and Canada East, where the
British majority and French minority were in conflict. And the
Constitution Act, 1867, made federation a fact.
• In 1982, Canada became fully independent from Great Britain by
giving it the right to amend its own constitution. Quebec’s provincial
government, however, did not accept the new constitution.
• Quebec continued to demand constitutional reforms, all intended to
guarantee its status as a distinct society. But, only succeeded in
alienating Canada’s English-speaking population, with its aggressive
measures to curtail the use of English in the province.
• The constitutional crisis continued up to 1995, whereas Quebec voters
again rejected independence from Canada in a referendum.
A Distinct Society
The Liberal Party of Quebec, announced five main conditions which would
enable a Liberal government to accept the Constitutional agreement of 1982:
• “… A preamble recognizing Quebec as a distinct society; a
constitutional right in the matter of immigration; a stipulation
126 providing for Quebec’s participation in the appointment of judges to
the Supreme Court; limitation of the federal spending power; and a
full veto for Quebec, written into the amending formula.”
• “Write into the Canadian Constitution an explicit recognition of Quebec
as a distinct society, homeland of the francophone element of
Canada’s duality;”
• “…Explicit constitutional recognition as a distinct society, with its own
language, culture, history, institutions and way of life … and the
accompanying political rights and responsibilities”.
Demographic Changes
As Quebec’s population declined and it grew in Ontario and the West, there
was a reduction in Quebec’s relative importance in the country. Starting with an
overwhelming majority in the 1700s, Quebec became less than a half of the
population in the 1800s, only to end up as a quarter of the population at the end of
the 1900s.
Threats to Canada’s Unity:
• Throughout the years, the demands of Quebec were all aimed at
preserving and strengthening Québec’s autonomy within the Canadian
federation.
• Since the late 1960s, a growing number of Quebecers have reached
the conclusion that the Canadian constitution no longer guarantees
Quebec either the means by which to develop or the protection of its
identity or place as a founding people. Faced with these facts, some
have concluded that Quebec’s only option is to become a sovereign
country.
• Voices calling for an: “English Canada” and “French Canada”, caused
great concern as it smacked of “two Canadas” rather than “Canadian
duality”.
• The referendum of October 30, 1995 suddenly revealed to the world a
federation in crisis and a people over seven million strong that nearly
127 chose sovereignty. What was most surprising was that many did not
foresee or evaluate the strong revival of national feeling in Quebec
that almost culminated in the breaking up of a prosperous, democratic
and modern country like Canada.
128 Appendix D
International Conflict – India and Pakistan
Introduction
The two countries have fought three wars, two of them over the disputed
region of Kashmir. The region is small, but nestled in the foothills of the Himalayas,
its strategic importance and beauty make it a prized possession.
The friction between India and Pakistan is relevant to the rest of the world
not only because both are the newest members of the nuclear club; it also affects
the stability and economic potential of region that includes more than a billion
people, some 950 million in India alone.
Partition
But the countries’ historic disputes over Kashmir will not be resolved easily.
The seeds for division were sown in their partition.
Britain, bowing to religious schisms at the time, carved the Muslim state of
Pakistan out of Indian Territory. The Hindu ruler of the predominantly Muslim area
of Kashmir acceded later to India – an action which Pakistan never recognized.
On the stroke of midnight 14-15 August 1947, the British Union Jack was
lowered down the flagstaff, and the independent states of India and Pakistan were
created. Within hours, one of the most terrible massacres and tragedies began
between India and Pakistan and their 400 million Hindu (66%) and Moslem (24%)
peoples.
The greatest exodus and transfer in history began, In the three months after
Muslim Pakistan was rent from Hindu India, forcing parallel migrations of some 12
million people! The refugees were on the move: poor people with humble
possessions, staggering in the summer heat, in groups as large as half a million
stretching 80 km. They passed each other as they made their way to new homes in
Hindu India or Muslim Pakistan. Many did not make it, as each side attacked the
other in the most gruesome and violent manner. Most historians of the period
place the figure at 500,000; some put it as high as 2 million.
129 The Continuing Conflict
The two countries went to war after which India retained two thirds in an
uneasy truce. Pakistan and India fought a second inconclusive war over the
Himalayan territory in 1965. The countries have pledged to resolve their dispute
peacefully, but have made little tangible progress.
Pakistan argues that Kashmir should have become part of Pakistan because
the majority of its population is Muslim, and wants a referendum to allow Kashmiris
to decide who is to rule them. India, which initially agreed to the idea, now opposes
it. Kashmir’s own separatist movement has claimed thousands of lives in the
Indian-ruled areas since 1990. India accuses Pakistan of supporting the separatists
militarily, but Islamabad says it only provides political support.
Today, roughly one third of Kashmir, the western sector, is administered by
Pakistan. Most of the remainder is under Indian control.
Added to the mix, Indian troops helped East Pakistan break away from West
Pakistan during a civil war in 1971, leading to the creation of the independent
nation of Bangladesh (one of the world’s poorest, most crowded countries, its 120
million people earning an average of $247 a year).
But the two governments have also made clear that they want a peaceful
resolution to the issues that divide them. Whether India and Pakistan can capitalize
on that desire for peace, or whether the long hostilities will destroy any such
initiative remains to be seen.
130 Appendix E
International Conflict – Yugoslavia
Background: Central Europe’s ancient civilizations have long been
dominated by empires: The Roman Empire, the Habsburg Empire (based in
Austria), and, more recently, the Soviet Communists. But the decline of
communism in the late twentieth century has unleashed old resentments, rivalries,
and ambitions that have caused yet more conflict in this troubled region.
Yugoslav Republics: Serbia and Montenegro remain joined in a truncated
Yugoslav federation. Slovenia, Croatia, Macedonia and Bosnia-Herzegovina have
each declared independence.
History: Croatia was under Austro-Hungarian rule until Yugoslavia was
formed in 1918. Its Serb minority – about 12% of the population – was introduced
by the Habsburgs into border areas as good fighters against Ottoman incursions.
Bosnia-Herzegovina was under Ottoman, then briefly under Austro-Hungarian
rule before 1918. In 1991, its population was: 44% Muslim; 31% Serb; 17% Croat;
with many people who considered themselves Yugoslavs the bulk of the rest.
Serbia was under Ottoman Turkish rule, gradually winning its freedom from
the Turks during the 19th century.
People and Religion: Serbs are Orthodox Christians; Croats are Roman
Catholic; Bosnia’s Muslims are Slavs who adopted their faith during centuries of
Ottoman Turkish rule.
Fighting: War erupted in June 1991 after Slovenia and Croatia declared
independence. Slovenia’s war ended in less than a month with fewer than 70 dead.
Croatia’s war of secession against Serb rebels backed by the Yugoslav army lasted
six months and killed an estimated 10,000 people. A tenuous cease-fire took hold in
January 1992. In April 1992, Bosnian Serbs rebelled against Bosnia’s independence
and an estimated 200,000 people have died and millions lost their homes in their
war against the Muslim-led government.
131 Slovenian War of Independence 1991
After the communist dictator Josip Tito died in 1980, longstanding ethnic,
religious, and economic tensions within Yugoslavia became more apparent.
Although the country comprised six republics and two self-governing provinces,
Serbia (the largest republic) dominated the federal government and army.
Resentment of Serbia grew when Slobodan Milosevic (1941-), who eventually
became president of the republic, began stirring up Serbian nationalism in 1987.
The prosperous republics of Slovenia and Croatia, no longer willing to subsidize
less-developed Serbia or to accept a centralized federal government under its
control, declared their independence from Yugoslavia on June 25, 1991. Fighting
erupted between Slovenia and the federal army, and continued until mid-July 1991
by which time several dozen people had been killed. The war ended when the
federal army withdrew its tanks and troops to concentrate on the neighboring
secessionist republic of Croatia (where, in contrast to ethnically homogeneous
Slovenia, there was a significant Serb minority).
Croatian War of Independence 1991-1995
Under its nationalist president Franjo Tudjman (1922-), Croatia declared its
independence from Yugoslavia on June 25, 1991, provoking an immediate response
from the federal military, erupting into full-scale war.
In 1991 Serbs constituted one-eighth of the Croatian population; encouraged
and armed by the federal military, Serb guerrillas took control of about one-third of
the republic, driving out members of other ethnic groups.
In January 1992, after at least 10,000 people had died in Croatia and after
14 cease-fires had been broken, a United Nations-sponsored truce took hold.
At the same, neighboring Bosnia and Herzegovina was also engulfed in war,
and the Croats feared that Bosnian Serb advances in late 1944 would further
embolden the Krajina Serbs. Sporadic fighting continued until its official ending in
1995, when leaders of Croatia, Bosnia, and Serbia signed the Dayton peace
accords.
132 The Bosnian Civil War 1992 – 1995
The Bosnian civil war was the most brutal chapter in the breakup of
Yugoslavia. On February 1992, the multiethnic republic of Bosnia and Herzegovina,
where Catholic Croats, Orthodox Serbs, and Muslim Slavs lived side by side, passed
a referendum for independence, but not all Bosnian Serbs agreed, and with the aid
of the federal army, dominated by Serbs, shelled Croats and Muslims in Sarajevo,
the Bosnian capital.
Bosnian Serb guerrillas carried out deadly campaigns of “ethnic cleansing,”
massacring members of other ethnic groups or expelling them from their homes to
create exclusively Serb areas.
In what became the worst refugee crisis in Europe since World War II,
millions of Bosnians (and Croatians) had been driven from their homes by July
1992.
Alarmed by ethnic cleansing and other human rights abuses (which Croats
and Muslims also engaged in, though to a lesser extent than did the Serbs), the
“enlightened world” awoke, and intervened. But this did not stop, Bosnian Serbs
(1994-1995), to massacre residents in Sarajevo, Srebenica, and other cities that
the United Nations had in May 1993 deemed “safe havens” for Muslim civilians.
On December 14, 1995, the leaders of Bosnia, Croatia, and Serbia signed the
Dayton peace accords, officially ending the wars in Bosnia and Croatia after about
250,000 people had died and more than 3 million others became refugees.
The Kosovo Uprising 1998-1999
Sporadic fighting between ethnic Albanian guerrillas and Serbian police in the
Serbian province of Kosovo in southern Yugoslavia escalated to a high-profile
conflict in early March 1998 when Serbian police and paramilitary forces began
blasting ethnic Albanian villages in the area surrounding the capital, Pristina, killing
dozens of defenseless residents.
The province of Kosovo, 90 percent of whose 2 million inhabitants are ethnic
Albanians, had been stripped in 1989 of its autonomous status within the republic
of Serbia by then-president of Serbia, Slobodan Milosevic (1941-) in reaction to the
province’s demand for independence.
133 More than 2,000 people have died and 300,000 have been displaced since
the fighting began.
Ethnic Cleansing
Of all the horrors of these wars, the most remembered is: “Ethnic Cleansing”,
the term used for the often brutal methods used by all sides to realize a main war
goal: To shift civilian populations to create ethnically pure areas.
The quest for independence of the fractions that were the former Federation
of Yugoslavia, when realized, turned into a bloody attempt to build segregate
communities and states, based on ethnic lines, proving once again that ethnic
differences have much deeper affects on human societies.
134 Appendix F
The Alternative Resolution Act (ADRA) 1996
135 The Administrative Dispute Resolution Act of 1996 (amending Pub. Law 101-552 and Pub. Law 102-354)
Sec. 1. Short Title
This Act may be cited as the “Administrative Dispute Resolution Act of 1996.”
Sec. 2. Findings
The Congress finds that–
(1) administrative procedure, as embodied in chapter 5 of title 5, United States Code, and other (2) administrative proceedings have become increasingly formal, costly, and lengthy resulting in (3) alternative means of dispute resolution have been used in the private sector for many years (4) such alternative means can lead to more creative, efficient, and sensible outcomes;
(5) such alternative means may be used advantageously in a wide variety of administrative (6) explicit authorization of the use of well-tested dispute resolution techniques will eliminate (7) Federal agencies may not only receive the benefit of techniques that were developed in the (8) the availability of a wide range of dispute resolution procedures, and an increased Sec. 3. Promotion of Alternative Means of Dispute Resolution
(a) Promulgation of Agency Policy.–Each agency shall adopt a policy that addresses the use of (1) consult with the agency designated by, or the interagency committee designated or established (2) examine alternative means of resolving disputes in connection with–
(A) formal and informal adjudications;
(B) rulemakings;
(C) enforcement actions; (D) issuing and revoking licenses or permits;
(E) contract administration;
(F) litigation brought by or against the agency; and
(G) other agency actions.
(b) Dispute Resolution Specialists.–The head of each agency shall designate a senior official to be (1) the provisions of this Act and the amendments made by this Act; and
(2) the agency policy developed under subsection (a)
(c) Training.–Each agency shall provide for training on a regular basis for the dispute resolution (d) Procedures for Grants and Contracts.
(1) Each agency shall review each of its standard agreements for contracts, grants, and other (2) (A) Within 1 year after the date of the enactment of this Act [Nov. 15, 1990], the Federal (B) For purposes of this section, the term `Federal Acquisition Regulation’ means the single Sec. 4. Administrative Procedures.
(a) Administrative Hearings.–Section 556(c) of title 5, United States Code, is amended–
(1) in paragraph (6) by inserting before the semicolon at the end thereof the following: “or by the (2) by redesignating paragraphs (7) through (9) as paragraphs (9) through (11), respectively, and “(7) inform the parties as to the availability of one or more alternative means of dispute resolution, “(8) require the attendance at any conference held pursuant to paragraph (6) of at least one (b) Alternative Means of Dispute Resolution.–Chapter 5 of title 5, United States Code, is “Subchapter IV Alternative Means of Dispute Resolution in the Administrative Process §571. Definitions.
§572. General authority.
§573. Neutrals.
§574. Confidentiality.
§575. Authorization of arbitration.
§576. Enforcement of arbitration agreements.
§577. Arbitrators.
§578. Authority of the arbitrator.
§579. Arbitration proceedings.
§580. Arbitration awards.
§581. Judicial review.
§582. Compilation of Information (Repealed).
§583. Support services.
§584. Authorization of appropriations (New).”
§571. Definitions
For the purposes of this subchapter, the term–
(1) “agency” has the same meaning as in section 551(1) of this title;
(2) “administrative program” includes a Federal function which involves protection of the public (3) “alternative means of dispute resolution” means any procedure that is used to resolve issues in (4) “award” means any decision by an arbitrator resolving the issues in controversy;
(5) “dispute resolution communication” means any oral or written communication prepared for (6) “dispute resolution proceeding” means any process in which an alternative means of dispute (7) “in confidence” means, with respect to information, that the information is provided–
(A) with the expressed intent of the source that it not be disclosed; or
(B) under circumstances that would create the reasonable expectation on behalf of the source that (8) “issue in controversy” means an issue which is material to a decision concerning an (A) between an agency and persons who would be substantially affected by the decision; or
(B) between persons who would be substantially affected by the decision;
(9) “neutral” means an individual who, with respect to an issue in controversy, functions (10) “party” means–
(A) for a proceeding with named parties, the same as in section 551(3) of this title; and
(B) for a proceeding without named parties, a person who will be significantly affected by the (11) “person” has the same meaning as in section 551(2) of this title; and
(12) “roster” means a list of persons qualified to provide services as neutrals.
§572. General authority
(a) An agency may use a dispute resolution proceeding for the resolution of an issue in (b) An agency shall consider not using a dispute resolution proceeding if–
(1) a definitive or authoritative resolution of the matter is required for precedential value, and (2) the matter involves or may bear upon significant questions of Government policy that require (3) maintaining established policies is of special importance, so that variations among individual (4) the matter significantly affects persons or organizations who are not parties to the proceeding;
(5) a full public record of the proceeding is important, and a dispute resolution proceeding cannot (6) the agency must maintain continuing jurisdiction over the matter with authority to alter the (c) Alternative means of dispute resolution authorized under this subchapter are voluntary §573. Neutrals
(a) A neutral may be a permanent or temporary officer or employee of the Federal Government or (b) A neutral who serves as a conciliator, facilitator, or mediator serves at the will of the parties.
(c) The President shall designate an agency or designate or establish an interagency committee to professional organizations experienced in matters concerning dispute resolution, shall–
(1) encourage and facilitate agency use of alternative means of dispute resolution; and
(2) develop procedures that permit agencies to obtain the services of neutrals on an expedited (d) An agency may use the services of one or more employees of other agencies to serve as (e) Any agency may enter into a contract with any person for services as a neutral, or for training §574. Confidentiality
(a) Except as provided in subsections (d) and (e), a neutral in a dispute resolution proceeding shall (1) all parties to the dispute resolution proceeding and the neutral consent in writing, and, if the (2) the dispute resolution communication has already been made public;
(3) the dispute resolution communication is required by statute to be made public, but a neutral (4) a court determines that such testimony or disclosure is necessary to–
(A) prevent a manifest injustice;
(B) help establish a violation of law; or
(C) prevent harm to the public health or safety,
of sufficient magnitude in the particular case to outweigh the integrity of dispute resolution (b) A party to a dispute resolution proceeding shall not voluntarily disclose or through discovery (1) the communication was prepared by the party seeking disclosure;
(2) all parties to the dispute resolution proceeding consent in writing;
(3) the dispute resolution communication has already been made public;
(4) the dispute resolution communication is required by statute to be made public;
(5) a court determines that such testimony or disclosure is necessary to–
(A) prevent a manifest injustice; (C) prevent harm to the public health and safety, of sufficient magnitude in the particular case to outweigh the integrity of dispute resolution (6) the dispute resolution communication is relevant to determining the existence or meaning of (7) except for dispute resolution communications generated by the neutral, the dispute resolution (c) Any dispute resolution communication that is disclosed in violation of subsection (a) or (b), (d) (1) The parties may agree to alternative confidential procedures for disclosures by a neutral. (2) To qualify for the exemption established under subsection (j), an alternative confidential (e) If a demand for disclosure, by way of discovery request or other legal process, is made upon a (f) Nothing in this section shall prevent the discovery or admissibility of any evidence that is (g) Subsections (a) and (b) shall have no effect on the information and data that are necessary to (h) Subsections (a) and (b) shall not prevent the gathering of information for research or (I) Subsections (a) and (b) shall not prevent use of a dispute resolution communication to resolve (j) A dispute resolution communication which is between a neutral and a party and which may not §575. Authorization of arbitration
(a) (1) Arbitration may be used as an alternative means of dispute resolution whenever all parties (A) submit only certain issues in controversy to arbitration; or
(B) arbitration on the condition that the award must be within a range of possible outcomes.
(2) The arbitration agreement that sets forth the subject matter submitted to the arbitrator shall be (3) An agency may not require any person to consent to arbitration as a condition of entering into (b) An officer or employee of an agency shall not offer to use arbitration for the resolution of (1) would otherwise have authority to enter into a settlement concerning the matter; or
(2) is otherwise specifically authorized by the agency to consent to the use of arbitration.
(c) Prior to using binding arbitration under this subchapter, the head of an agency, in consultation §576. Enforcement of arbitration agreements
An agreement to arbitrate a matter to which this subchapter applies is enforceable pursuant to §577. Arbitrators
(a) The parties to an arbitration proceeding shall be entitled to participate in the selection of the (b) The arbitrator shall be a neutral who meets the criteria of section 573 of this title.
§578. Authority of the arbitrator
An arbitrator to whom a dispute is referred under this subchapter may-
(1) regulate the course of and conduct arbitral hearings;
(2) administer oaths and affirmations;
(3) compel the attendance of witnesses and production of evidence at the hearing under the (4) make awards.
§579. Arbitration proceedings
(a) The arbitrator shall set a time and place for the hearing on the dispute and shall notify the (b) Any party wishing a record of the hearing shall–
(1) be responsible for the preparation of such record other parties and the arbitrator of the (2) notify the other parties and the arbitrator of the preparation of such record;
(3) furnish copies to all identified parties and the arbitrator; and
(4) pay all costs for such record, unless the parties agree otherwise or the arbitrator determines (c) (1) The parties to the arbitration are entitled to be heard, to present evidence material to the (2) The arbitrator may, with the consent of the parties, conduct all or part of the hearing by (3) The hearing shall be conducted expeditiously and in an informal manner.
(4) The arbitrator may receive any oral or documentary evidence, except that irrelevant, (5) The arbitrator shall interpret and apply relevant statutory and regulatory requirements, legal (d) No interested person shall make or knowingly cause to be made to the arbitrator an (e) The arbitrator shall make the award within 30 days after the close of the hearing, or the date of (1) the parties agree to some other time limit; or
(2) the agency provides by rule for some other time limit.
§580. Arbitration awards
(a) (1) Unless the agency provides otherwise by rule, the award in an arbitration proceeding under (2) The prevailing parties shall file the award with all relevant agencies, along with proof of (b) The award in an arbitration proceeding shall become final 30 days after it is served on all (c) A final award is binding on the parties to the arbitration proceeding, and may be enforced (d) An award entered under this subchapter in an arbitration proceeding may not serve as an proceeding, whether conducted under this subchapter, by an agency, or in a court, or in any other §581. Judicial Review
(a) Notwithstanding any other provision of law, any person adversely affected or aggrieved by an (b) A decision by an agency to use or not to use a dispute resolution proceeding under this §582. Compilation of Information (Repealed)
§583. Support Services
For the purposes of this subchapter, an agency may use (with or without reimbursement) the §584. Authorization of appropriations
There are authorized to be appropriated such sums as may be necessary to carry out the purposes Sec. 5. Judicial Review of Arbitration Awards.
Section 10 of title 9, United States Code, is amended–
(1) by designating subsections (a) through (e) as paragraphs (1) through (5), respectively;
(2) by striking out “In either” and inserting in lieu thereof “(a) in any”; and
(3) by adding at the end thereof the following:
“(b) The United States district court for the district wherein an award was made that was issued Sec. 6. Government Contract Claims.
(a) Alternative Means of Dispute Resolution.–Section 6 of the Contract Disputes Act of 1978 (41 “(d) Notwithstanding any other provision of this Act, a contractor and a contracting officer may apply to such alternative means of dispute resolution.”
(b) Judicial Review of Arbitral Awards.–Section 8(g) of the Contract Disputes Act of 1978 (41 “(3) An award by an arbitrator under this Act shall be reviewed pursuant to sections 9 through 13 Sec. 7. Federal Mediation and Conciliation Service.
Section 203 of the Labor Management Relations Act, 1947 (29 U.S.C. 173) is amended by adding “(f) The Service may make its services available to Federal agencies to aid in the resolution of Sec. 8. Government Tort and Other Claims. (a) Federal Tort Claims.–Section 2672 of title 28, (b) Claims of the Government.–Section 3711(a)(2) of title 31, United States Code, is amended by Sec. 9. Use of Nonattorneys. (a) Representation of Parties.–Each agency, in developing a policy (1) the extent to which individuals are represented or assisted by attorneys or by persons who are (2) whether the subject areas of the applicable proceedings or the procedures are so complex or (b) Representation and Assistance by Nonattorneys.–A person who is not an attorney may provide representation or assistance to any individual in a claim or dispute with an agency, if–
(1) such claim or dispute concerns an administrative program identified under subsection (a);
(2) such agency determines that the proceeding or procedure does not necessitate representation (3) such person meets any requirement of the agency to provide representation or assistance in (c) Disqualification of Representation or Assistance.–Any agency that adopts regulations under (1) ensure that any rules pertaining to disqualification of attorneys from practicing before the (2) establish effective agency procedures for enforcing such rules of practice and for receiving Sec. 10. Definitions.
As used in this Act, the terms ‘agency’, ‘administrative program’, and ‘alternative means of dispute Sec. 11. Reauthorization of Negotiated Rulemaking Act of 1990.
(a) Permanent Reauthorization.- Section 5 of the Negotiated Rulemaking Act of 1990 (Public Sec. 12. Jurisdiction of the United States Court of Federal Claims and the District Courts (a) Bid Protests- Section 1491 of title 28, United States Code, is amended–
(1) by redesignating subsection (b) as subsection (c);
(2) in subsection (a) by striking out paragraph (3); and
(3) by inserting after subsection (a), the following new subsection:
“(b)(1) Both the United States Court of Federal Claims and the district courts of the United States “(2) To afford relief in such an action, the courts may award any relief that the court considers “(3) In exercising jurisdiction under this subsection, the courts shall give due regard to the action. “(4) In any action under this subsection, the courts shall review the agency’s decision pursuant to (b) Effective Date- This section and the amendments made by this section shall take effect on (c) Study- No earlier than 2 years after the effective date of this section, the United States General (d) Sunset- The jurisdiction of the district courts of the United States over the actions described in (e) Savings Provisions-
(1) Orders- A termination under subsection (d) shall not terminate the effectiveness of orders that (2) Proceedings and Applications-
(A) a termination under subsection (d) shall not affect the jurisdiction of a court of the United (B) Orders may be issued in any such proceeding, appeals may be taken therefrom, and payments (C) Nothing in this paragraph prohibits the discontinuance or modification of any such proceeding (f) Nonexclusivity of GAO Remedies- In the event that the bid protest jurisdiction of the district 3.1 – Part I – Personal Styles 2.3 – Principle II – Focus on Interests, not Positions
unilateral or bilateral methods, but still wish to do so, outside of the Legal Courts of
the land, they may utilize the good services of a third party, or seek alternative
most popular forms are arbitration and mediation. Other models include processes
like: mini-trial; early neutral evaluation; moderated settlement conference;
mediation-arbitration (med-arb); neutral fact-finding, “rent-a-judge”; and summary
jury trial.
Communication Quarterly; New York; Dec 2001;
sale, and thus would begin the bargaining, by placing a high entering price tag to
may be appropriate for situation A, may not be appropriate for situation B. dealing
knowledge of the range, within which an agreed price could be found. For example:
when we are negotiating the sales commission of a salesman, we know the total
sales amount, and only need to decide on how to distribute this amount between
city Y; or the hourly wages for a qualified technician in the Z industry, we have well
advertised current market values. So, the negotiation range tends to focus around
to avoid unnecessary “horse trading and haggling”, you may see them agree to:
where uncertainty prevails. If we wish to sell, and set too high an EP, we may
“frighten off” potential buyers, or if we wish to buy and present an offer way below
the seller’s worst expectations, he will surly walk away. To make matters worse, we
are never sure of the other side’s usage of: words, signals and behavior, as an
indication that “what he says, is what he means” and vice-versa.
activity we undertake. But it is twice as important and necessary, when we
that the other party has their own. It is most likely, that these needs and
expectations do not coincide. Therefore, we must approach the table, as best
face encounter, will save time and efforts. When faced with a process of significant
uncertainty, a sound preparation, will allow us to better deal with the many
models, to assist anyone wishing to prepare for a negotiation session. The more the
topic of discussion, becomes complex and wider of scope, the more these
preparing for negotiation, we need to set clear and define these goals and
process.
All exchange of: communications, options and solutions, are evaluated solely
as to best serve my interests. It is on and over these positions that I will negotiate.
sides wish to exchange “something of value” between them, and need to reach an
prepared ourselves, and arrive at the table “armed with our good notes” and are
The exchange of ideas, information, offers and counter-offers, requires the
style, will ensure that discussions will focus on the issue at hand, and not slide
of their stand on the issues, and the exchange of relevant information is the
atmosphere and conduct of both sides, in this phase. Therefore, we need to know
what constructs a positive and constructive discussion, and what is detrimental and
Proposals are an indication of our readiness to reach a solution. We must
reaching one. It needs to be presented, as a serious attempt and with all
the other side. Whatever we wish to offer, is always conditioned, by some form of
a tentative offering on our behalf, but try if possible to be more specific, in what we
bypass the preparatory and optional solution finding phase, and try to “close the
based on “gut feelings”. Others are in need of carefully analyzed data, before they
how to better communicate with him.
combinations of verbal preference and comfort level with showing emotions in
giving and receiving information”. And divides them into 4 category styles:
attributes, people may adopt a certain style or mix of styles, dependant on their
developed our own personal combination of them all, synthesized together into a
method, to the field of conflict resolution. Their “Principled Negotiation” method, is
efficient, and which improves the parties’ relationship”. Our overall consideration
should be to satisfy our interests, and retain good working relations, between the
principles being: (a) Separate the people from the problem; (b) Focus on interests,
• Keeping the relationship between the two parties intact. When
76
personally involved in their side’s position. This will result in them responding and
reacting to our responses, in a personal manner, to the extent of it being a personal
discussions focused, and ensure that it does not become personal. As this can and
other side, may only make a bad situation, worse. Many times, showing empathy
and genuine consideration, may help in lowering the intensity of the emotional
continuous and very stressful meeting or meetings. Physical fatigue and tiredness,
play a substantial part in the ability to focus, and many times, nervous emotional
his counterpart, with full attentiveness. This is done, by asking
Business Communication Quarterly; New York; Dec 2001;
conflict should be present at the mediation session. If absent,
their written authority or consent must be obtained before the
mediation has been adjourned.
• All terms and conditions of settlement should be summarized in
the presence of all participants. The terms should then be in
written form and signed by all participants.
• Attorneys may have the parties sign releases of liability and
sometimes a more formal settlement agreement.
• Does not rush things.
• Has intense focus.
• Must be unbiased and able to stay objective.
problems.
by judge or jury. The two most popular forms are arbitration and
mediation. Other models include processes like: mini-trial; early
neutral evaluation; moderated settlement conference; mediation-
arbitration (med-arb); neutral fact-finding, “rent-a-judge”; and
summary jury trial.
c. There are many cases, when the conflict, cannot be resolved by the
language; very high-wired emotional and behavioral manifestations
not allowing for any focus on the issues; what ever you do, your
counterpart is not responsive or not cooperating with you directly.
d. It must be clear, that step one, is the willingness of the parties to
these proceedings, their agreement on the choice of the person doing
the intervention (be it a skillful communicator or a professional
mediator), and their acceptance of the “rules of the game”.
Communication Quarterly; New York; Dec 2001;
towards him.
• Judicious temperament: impartiality, patience, courtesy
• Strong academic background and professional or business
credentials
Rachlin & Martin. Hieros Gamos
Pleadings Arbitration avoids entirely all
requirements. The initial
arbitration filing may be as
simple as a letter, which
briefly explains the dispute
in layman’s terms, refers to
the arbitration contract, and
asks for arbitration to be
started.
pleadings: motions for more particular
statement and motions to dismiss for
failure to state a claim, are common.
more or less expensive than
court filing fees. Most ASFs
will charge filing fees based
either on a nominal fee or as
a percentage of the amount
in dispute.
amount in dispute.
Fees
paid. Typically, the
arbitrator’s fee is split
between the parties, unless
the arbitration agreement
provides otherwise.
paying the judge’s salary.
Room
Expenses.
rent a conference room at a
mutual location, such as a
conference room in a hotel.
In most cases this cost is
avoided by using attorneys’
conference rooms.
courtroom.
Discovery
for discovery. Parties can
agree as to the extent of
pre-trial discovery that will
be permitted. Generally
speaking, discovery is freely
available in arbitration so
long as the discovery is not
abusive.
extensive pre-trial discovery.
always scheduled with a
view toward the
convenience of the
participants.
Most arbitration hearings
regard to the schedule of the litigants.
Courts have substantial backlogs.
Cases may take as long as one or two
years to come to trial, and appeals by
extend the dispute even longer.
concluded within six months
after they are invoked.
in private, and arbitration
records can be kept private.
documents, unless sealed by the
court, become public documents.
the Trial on
the Merits.
accepted (unless the parties
agree otherwise), and it is
rare that an arbitrator would
exclude anything from
evidence. Questioning is
informal and most
arbitrators will tolerate a
few objections from
opposing counsel.
evidence, and a substantial body of
law exists which requires certain
formalities in the presentation of
evidence: witnesses will be required
to come to the hearing in order to
identify documents; hearsay
statements will not be introduced etc.
Format
form of the decision. Parties
may specify that the
arbitrator provide a written
decision explaining its
rationale, or they may agree
that the arbitrator provides
no explanation at all.
Generally speaking, the
parties prefer to have an
arbitrator issue an award
without any accompanying
rationale.
take the form of a general verdict
which simply indicates the party who
prevailed and the amount owed.
In cases tried to the court, most
courts must provide, upon request,
written findings of fact and
conclusions of law, which explain, in
detail, the rationale for the court’s
decision.
appeal from an arbitration
award. Most arbitration
proceedings purport to be
“final and binding,” with the
result that courts are
reluctant to review
arbitration awards, even if it
alleged that the arbitrator
found facts unsupported by
evidence or misapplied the
law.
has the opportunity to appeal as a
matter of right. The judgment of the
court does not become final until the
appeal is concluded.
Pub. Law 104-320
statutes, is intended to offer a prompt, expert, and inexpensive means of resolving disputes as an
alternative to litigation in the Federal courts;
unnecessary expenditures of time and in a decreased likelihood of achieving consensual resolution
of disputes;
and, in appropriate circumstances, have yielded decisions that are faster, less expensive, and less
contentious;
programs;
ambiguity of agency authority under existing law;
private sector, but may also take the lead in the further development and refinement of such
techniques; and
understanding of the most effective use of such procedures, will enhance the operation of the
Government and better serve the public.
alternative means of dispute resolution and case management. In developing such a policy, each
agency shall–
by, the President under section 573 of title 5, United States Code, to facilitate and encourage
agency use of alternative dispute resolution under subchapter IV of chapter 5 of such title; and
the dispute resolution specialist of the agency. Such official shall be responsible for the
implementation of–
specialist of the agency and other employees involved in implementing the policy of the agency
developed under subsection (a). Such training should encompass the theory and practice of
negotiation, mediation, arbitration, or related techniques. The dispute resolution specialist shall
periodically recommend to the agency head agency employees who would benefit from similar
training.
assistance and shall determine whether to amend any such standard agreements to authorize and
encourage the use of alternative means of dispute resolution.
Acquisition Regulation shall be amended, as necessary, to carry out this Act and the amendments
made by this Act.
system of Government-wide procurement regulation referred to in section 6(a) of the Office of
Federal Procurement Policy Act (41 U.S.C. 405(a)).
use of alternative means of dispute resolution as provided in subchapter IV of this chapter”; and
inserting after paragraph (6) the following new paragraphs:
and encourage use of such methods;
representative of each party who has authority to negotiate concerning resolution of issues in controversy;”.
amended by adding at the end the following new subchapter:
interest and the determination of rights, privileges, and obligations of private persons through rule
making, adjudication, licensing, or investigation, as those terms are used in subchapter II of this
chapter;
controversy, including, but not limited to, conciliation, facilitation, mediation, fact finding,
minitrials, arbitration, and use of ombuds, or any combination thereof;
the purposes of a dispute resolution proceeding, including any memoranda, notes or work product
of the neutral, parties or nonparty participant; except that a written agreement to enter into a
dispute resolution proceeding, or final written agreement or arbitral award reached as a result of a
dispute resolution proceeding, is not a dispute resolution communication;
resolution is used to resolve an issue in controversy in which a neutral is appointed and specified
parties participate;
the information will not be disclosed;
administrative program of an agency, and with which there is disagreement–
specifically to aid the parties in resolving the controversy;
decision in the proceeding and who participates in the proceeding;
controversy that relates to an administrative program, if the parties agree to such proceeding.
such a proceeding is not likely to be accepted generally as an authoritative precedent;
additional procedures before a final resolution may be made, and such a proceeding would not
likely serve to develop a recommended policy for the agency;
decisions are not increased and such a proceeding would not likely reach consistent results among
individual decisions;
provide such a record; and
disposition of the matter in the light of changed circumstances, and a dispute resolution
proceeding would interfere with the agency’s fulfilling that requirement.
procedures which supplement rather than limit other available agency dispute resolution techniques.
any other individual who is acceptable to the parties to a dispute resolution proceeding. A neutral
shall have no official, financial, or personal conflict of interest with respect to the issues in
controversy, unless such interest is fully disclosed in writing to all parties and all parties agree that
the neutral may serve.
facilitate and encourage agency use of dispute resolution under this subchapter. Such agency or
interagency committee, in consultation with other appropriate Federal agencies and
basis.
neutrals in dispute resolution proceedings. The agencies may enter into an interagency agreement
that provides for the reimbursement by the user agency or the parties of the full or partial cost of
the services of such an employee.
in connection with alternative means of dispute resolution. The parties in a dispute resolution
proceeding shall agree on compensation for the neutral that is fair and reasonable to the Government.
not voluntarily disclose or through discovery or compulsory process be required to disclose any
dispute resolution communication or any communication provided in confidence to the neutral,
unless–
dispute resolution communication was provided by a nonparty participant, that participant also
consents in writing;
should make such communication public only if no other person is reasonably available to disclose
the communication; or
proceedings in general by reducing the confidence of parties in future cases that their
communications will remain confidential;
or compulsory process be required to disclose any dispute resolution communication, unless–
(B) help establish a violation of law; or
proceedings in general by reducing the confidence of parties in future cases that their
communications will remain confidential;
an agreement or award that resulted from the dispute resolution proceeding or to the enforcement
of such an agreement or award; or
communication was provided to or was available to all parties to the dispute resolution
proceeding.
shall not be admissible in any proceeding relating to the issues in controversy with respect to
which the communication was made.
Upon such agreement the parties shall inform the neutral before the commencement of the dispute
resolution proceeding of any modifications to the provisions of subsection (a) that will govern the
confidentiality of the dispute resolution proceeding. If the parties do not so inform the neutral,
subsection (a) shall apply.
procedure under this subsection may not provide for less disclosure than the confidential
procedures otherwise provided under this section.
neutral regarding a dispute resolution communication, the neutral shall make reasonable efforts to
notify the parties and any affected nonparty participants of the demand. Any party or affected
nonparty participant who receives such notice and within 15 calendar days does not offer to
defend a refusal of the neutral to disclose the requested information shall have waived any
objection to such disclosure.
otherwise discoverable, merely because the evidence was presented in the course of a dispute
resolution proceeding.
document an agreement reached or order issued pursuant to a dispute resolution proceeding.
educational purposes, in cooperation with other agencies, governmental entities, or dispute
resolution programs, so long as the parties and the specific issues in controversy are not
identifiable.
a dispute between the neutral in a dispute resolution proceeding and a party to or participant in
such proceeding, so long as such dispute resolution communication is disclosed only to the extent
necessary to resolve such dispute.
be disclosed under this section shall also be exempt from disclosure under section 552(b)(3).
consent. Consent may be obtained either before or after an issue in controversy has arisen. A
party may agree to–
in writing. Each such arbitration agreement shall specify a maximum award that may be issued by
the arbitrator and may specify other conditions limiting the range of possible outcomes.
a contract or obtaining a benefit.
issues in controversy unless such officer or employee–
with the Attorney General and after taking into account the factors in section 572(b), shall issue
guidance on the appropriate use of binding arbitration and when an officer or employee of the
agency has authority to settle an issue in controversy through binding arbitration.
section 4 of title 9, and no action brought to enforce such an agreement shall be dismissed nor
shall relief therein be denied on the grounds that it is against the United States or that the United
States is an indispensable party.
arbitrator
provisions of section 7 of title 9 only to the extent the agency involved is otherwise authorized by
law to do so; and
parties not less than 5 days before the hearing.
preparation of such record;
that the costs should be apportioned.
controversy, and to cross-examine witnesses appearing at the hearing.
telephone, television, computer, or other electronic means, if each party has an opportunity to
participate.
immaterial, unduly repetitious, or privileged evidence may be excluded by the arbitrator.
precedents, and policy directives.
unauthorized ex parte communication relevant to the merits of the proceeding, unless the parties
agree otherwise. If a communication is made in violation of this subsection, the arbitrator shall
ensure that a memorandum of the communication is prepared and made a part of the record, and
that an opportunity for rebuttal is allowed. Upon receipt of a communication made in violation of
this subsection, the arbitrator may, to the extent consistent with the interests of justice and the
policies underlying this subchapter, require the offending party to show cause why the claim of
such party should not be resolved against such party as a result of the improper conduct.
the filing of any briefs authorized by the arbitrator, whichever date is later, unless–
this subchapter shall include a brief, informal discussion of the factual and legal basis for the
award, but formal findings of fact or conclusions of law shall not be required.
service on all parties.
parties. Any agency that is a party to the proceeding may extend this 30-day period for an
additional 30-day period by serving a notice of such extension on all other parties before the end
of the first 30-day period.
pursuant to sections 9 through 13 of title 9. No action brought to enforce such an award shall be
dismissed nor shall relief therein be denied on the grounds that it is against the United States or
that the United States is an indispensable party.
estoppel in any other proceeding for any issue that was resolved in the proceeding. Such an award
also may not be used as precedent or otherwise be considered in any factually unrelated
arbitration proceeding.
award made in an arbitration proceeding conducted under this subchapter may bring an action for
review of such award only pursuant to the provisions of sections 9 through 13 of title 9.
subchapter shall be committed to the discretion of the agency and shall not be subject to judicial
review, except that arbitration shall be subject to judicial review under section 10(b) of title 9.
services and facilities of other Federal agencies, State, local, and tribal governments, public and
private organizations and agencies, and individuals, with the consent of such agencies,
organizations, and individuals. An agency may accept voluntary and uncompensated services for
purposes of this subchapter without regard to the provisions of section 1342 of title 31.
of this subchapter.
pursuant to section 580 of title 5 may make an order vacating the award upon the application of a
person, other than a party to the arbitration, who is adversely affected or aggrieved by the award,
if the use of arbitration or the award is clearly inconsistent with the factors set forth in section 572
of title 5.”.
U.S.C. 605) is amended by adding at the end the following new subsections:
use any alternative means of dispute resolution under subchapter IV of chapter 5 of title 5, United
States Code, or other mutually agreeable procedures, for resolving claims. The contractor shall
certify the claim when required to do so as provided under subsection (c)(1) or as otherwise
required by law. All provisions of subchapter IV of chapter 5 of title 5, United States Code, shall
U.S.C. 607(g)) is amended by adding at the end the following new paragraph:
of title 9, United States Code, except that the court may set aside or limit any award that is found
to violate limitations imposed by Federal statute.”
at the end the following new subsection:
disputes under the provisions of subchapter IV of chapter 5 of title 5, United States Code.
Functions performed by the Service may include assisting parties to disputes related to
administrative programs, training persons in skills and procedures employed in alternative means
of dispute resolution, and furnishing officers and employees of the Service to act as neutrals. Only
officers and employees who are qualified in accordance with section 573 of title 5, United States
Code, may be assigned to act as neutrals. The Service shall consult with the agency designated by,
or the interagency committee designated or established by, the President under section 573 of title
5, United States Code, in maintaining rosters of neutrals and arbitrators, and to adopt such
procedures and rules as are necessary to carry out the services authorized in this subsection.”
United States Code, is amended by adding at the end of the first paragraph the following:
“Notwithstanding the proviso contained in the preceding sentence, any award, compromise, or
settlement may be effected without the prior written approval of the Attorney General or his or
her designee, to the extent that the Attorney General delegates to the head of the agency the
authority to make such award, compromise, or settlement. Such delegations may not exceed the
authority delegated by the Attorney General to the United States attorneys to settle claims for
money damages against the United States. Each Federal agency may use arbitration, or other
alternative means of dispute resolution under the provisions of subchapter IV of chapter 5 of title
5, to settle any tort claim against the United States, to the extent of the agency’s authority to
award, compromise, or settle such claim without the prior written approval of the Attorney
General or his or her designee.”
striking out “$20,000 (excluding interest)” and inserting in lieu thereof “$100,000 (excluding
interest) or such higher amount as the Attorney General may from time to time prescribe.”
on the use of alternative means of dispute resolution under this Act, shall develop a policy with
regard to the representation by persons other than attorneys of parties in alternative dispute
resolution proceedings and shall identify any of its administrative programs with numerous claims
or disputes before the agency and determine–
not attorneys; and
specialized that only attorneys may adequately provide such representation or assistance.
or assistance by an attorney under subsection (a)(2); and
such a claim or dispute.
subchapter IV of chapter 5 of title 5, United States Code, to permit representation or assistance
by persons who are not attorneys shall review the rules of practice before such agency to–
agency shall also apply, as appropriate, to other persons who provide representation or assistance;
and
complaints from affected persons.
resolution’ have the meanings given such terms in section 571 of title 5, United States Code
(enacted as section 581 of title 5, United States Code, by section 4(b) of this Act, and
redesignated as section 571 of such title by section 3(b) of the Administrative Procedure
Technical Amendments Act of 1991).
Law 101-648; 5 U.S.C. 561 note) is repealed.
of the United States: Bid Protests.
shall have jurisdiction to render judgment on an action by an interested party objecting to a
solicitation by a Federal agency for bids or proposals for a proposed contract or to a proposed
award or the award of a contract or any alleged violation of statute or regulation in connection
with a procurement or a proposed procurement. Both the United States Court of Federal Claims
and the district courts of the United States shall have jurisdiction to entertain such an action
without regard to whether suit is instituted before or after the contract is awarded.
proper, including declaratory and injunctive relief except that any monetary relief shall be limited
to bid preparation and proposal costs.
interests of national defense and national security and the need for expeditious resolution of the
the standards set forth in section 706 of title 5.”.
December 31, 1996 and shall apply to all actions filed on or after that date.
Accounting Office shall undertake a study regarding the concurrent jurisdiction of the district
courts of the United States and the Court of Federal Claims over bid protests to determine
whether concurrent jurisdiction is necessary. Such a study shall be completed no later than
December 31, 1999, and shall specifically consider the effect of any proposed change on the
ability of small businesses to challenge violations of Federal procurement law.
section 1491(b)(1) of title 28, United States Code (as amended by subsection (a) of this section)
shall terminate on January 1, 2001 unless extended by Congress. The savings provisions in
subsection (e) shall apply if the bid protest jurisdiction of the district courts of the United States
terminates under this subsection.
have been issued by a court in connection with an action within the jurisdiction of that court on or
before December 31, 2000. Such orders shall continue in effect according to their terms until
modified, terminated, superseded, set aside, or revoked by a court of competent jurisdiction or by
operation of law.
States to continue with any proceeding that is pending before the court on December 31, 2000.
may be made pursuant to such orders, as if such termination had not occurred. An order issued in
any such proceeding shall continue in effect until modified, terminated, superseded, set aside, or
revoked by a court of competent jurisdiction or by operation of law.
under the same terms and conditions and to the same extent that proceeding could have been
discontinued or modified absent such termination.
courts of the United States is terminated pursuant to subsection (d), then section 3556 of title 31,
United States Code, shall be amended by striking `a court of the United States or’ in the first sentence.
3.2 – Part II – Face to Face Communication
3.3 – Part III – Competitive vs. Cooperative Approaches
1.1 – Distributive Bargaining
1.2 – Preparations for Negotiation
1.2.1 – Interests and Positions
1.3.1 – Phase I – The Discussion
1.3.2 – Phase II – Making and Accepting Proposals
1.3.2.1 – Making Proposals
1.3.2.2 – Accepting Proposals
1.3.3 – Phase III – “Closing the Deal”
2.1 – Introduction
2.3.1 – Interests vs. Positions
Idea Generation
This is the most creative part. Everyone is encouraged to “throw-in” an idea, suggestion or solution. There is no criticism or ridicule, as this will call off the willingness to participate, and diminish the creativity flow.
Idea Evaluation
Choosing a Solution
2.5 – Principle IV – Insist on Using Objective Criteria
Introduction
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