Alternative Dispute Resolution - Results Matter

Greg Pollock, Chief Executive

Comparing the way that New Zealand organisations and individuals go about resolving their disputes to others internationally is an interesting exercise. I recently attended a conference in Seattle of the American Bar Association on dispute resolution. While this was a large conference with many excellent ideas and presentations, I came away with three major observations:

Firstly, results matter. There continues to be a strong focus on resolution rates for mediators, timeframes for arbitrations and other process metrics. Increasingly, parties are starting to look at the results from the alternative dispute resolution (ADR) process and considering the value for money they get from it. Value comes from factors such as the durability of agreements reached, enforceability of agreements, and the tools practitioners use to help parties resolve unknown issues in the future.

Results matter to the commercial sector of course, and in-house lawyers in America’s large corporates are increasingly turning to mediation and arbitration, particularly where their contractual partners are based internationally. This is especially true when the contract relates to activity in a country where there is less confidence in the local justice system. I spoke with a number of in-house lawyers who confirmed their companies have historically invested where there are reliable justice systems. ADR clauses in contracts provide companies with more certainty, and businesses can be more agile and invest in new areas.

Secondly, the ADR sector needs to better understand its target market. There has been a ‘build it and they will come’ approach in many markets internationally – both in government or private sector areas. More market research is needed to understand customer needs, the nature of disputes and the techniques that can readily resolve them is needed.

Our business markets are changing so rapidly and business models changing constantly, that ADR has an increasingly important role to play. It almost appears to be an inverse relationship – the faster business moves and changes, the slower traditional justice systems perform. In many countries with rapid growth, justice systems are not able to keep up with demand. ADR can be the differentiator that helps unblock commercial and other disputes for businesses that need certainty and agility. ADR practitioners are developing new techniques in order to meet this demand. For example, online dispute resolution tools are being used to resolve disputes created online.

Finally, quality assurance is something that in New Zealand (and at Fair Way) we take very seriously, and from my observation our standards of practice are well ahead of the USA. We have robust QA processes, particularly in larger dispute resolution schemes, but also through our professional bodies. Interestingly, in the USA there is a proliferation of statutory dispute resolution schemes, but as yet there appears to be little apparent emphasis on quality frameworks.