ALTERNATIVES TO LITIGATION: FACTORS IN CHOOSING

ALTERNATIVES TO LITIGATION: FACTORS IN CHOOSING*

THE thesis of this paper is that law in the twenty first century can and should embrace both litigation and its alternatives as equally available options for people in disputes. The time has come to break the monopoly of influence which the state’s statutes and the state’s courts have in the practice and teaching of law.

Legal sociologists and legal anthropologists have been demonstrat- ing for decades that the “law” which law students study and most lawyers practice is only a small part of the law which exists in society.’ Law Schools may have conceded the odd course or part of a course to alternatives to the formal courts. Lawyers in a growing number of areas may have been forced increasingly to deal with arbitration, mediation negotiation and other forms of dispute resolution in their practices.’Yet most lawyers still think of themselves as specialists in adjudication and of alternatives to adjudication as processes outside the law, which do not concern legal practice or teaching.

The adjudicative bias of today’s legal profession is not only a fan- tasy: it harms dispute resolution. Litigation as used in many traditional areas of law is too expensive, divisive, inaccessible or ineffe~t ive,~ in part because it is used in cases where adjudication is not appropriate to the dispute and parties involved. Alternatives to litigation are too often so regulated or perverted by litigation-minded lawyers, courts and legislators that they become alternative methods of litigation rather than alternatives to l i t i ga t i~n .~ Yet alternatives to

* This is a revised version of a paper given at the ESRC postgraduate student confer- ence at Sheffield on April 25, 1986. The research for this paper was done as part of a PhD in comparative labour law at University College, University of London. I am indebted to my supervisor, Professor B. Hepple, as well as to Professor L. S. Sealy. The views expressed are, of course, totally the responsibility of the author.

Beginning with Ehrlich’s Fundamenfa1 Principles of fhe Sociology of Law (1912). Master Jacob provides a poignant illustration in modern English experience with the observation that only 0.5%-0.6% of the writs in the Queen’s Bench go to trial, in Cap- pelletti and Garth, eds. Access foJusfice (1978) Vol I, Book 1 p. 429 (table I).

* Conciliation has been a major aspect in the settlement of labour disputes in Eng- land at least since the enactment of the Conciliation Act 1896. Commercial arbitration has an even longer history and is a major aspect of English commercial law. Goode states the common knowledge in Commercial Law (1982) at p. 971: “Lawyers prefer litigation, businessmen prefer arbitration.” Increasingly, family practice involves conciliation in some form. See, e.g. Eekelaar, Family LawandSocialPolicy (1984) p. 57 et se

‘See. e.g. Ison, “Small Claims” (1972) 35 M.L.R. 18; Eekelaar, “The Place of Div- orce In Family Law’s New Role” (1975) 38 M.L.R. 241,249-250 and Cappelletti and Garth, op. cif., note 1, generally.

Parris’s, criticisms of the role of the courts in commercial arbitration throughout Arbifration (1983) make this point, as do the critics of ‘‘legalism” in the Industrial Tri- bunals, e.g. Rideout, “Unfair Dismissal-Tribunal Or Arbitration” (1986) 15 I.L.J. 84. Recently ACAS has expressed concern over legalisation of its individual conciliation procedures in its 1984 Annual Report p. 65 and in its 1985 Annual Report p. 83.

480

JULY 19891 ALTERNATIVES TO LITIGATION 481

litigation, when used in inappropriate cases, can deny parties needed legal protection or frustrate beneficial public policie~.~ In place of the pretended chasm between “legal” and “non-legal” means of dispute resolution, we need a unified theory of dispute resolution which states the sorts of disputes in which each alternative method of resolving disputes is most effective.

On the basis of a unified theory of dispute resolution, law could be understood and practised as what it is: the process of resolving disputes through the intervention of neutrals, regardless of which of the generally accepted forms of intervention the neutrals use. Then, with a more honest concept of law, free of adjudication’s monomania, solicitors and legal researchers could think of themselves as dispute resolution artists, prepared to work in any medium of their art.

To build a unified theory of dispute resolution, we need to begin to draw some general conclusions from the wealth of experience of western industrial societies with various forms of dispute resolution. From the conclusions of various writers, argued against one another and tested in various dispute processes, a consensus will emerge on the necessary conditions of dispute for effective use of each method of resolution. This paper will present the arguments for one set of conclusions, drawn from a study of various examples of dispute resolution in Britain and America.

THE ALTERNATIVES There are many potential means of resolving a dispute, ranging in formality from a court process to physical violence. Law concerns itself with all of these means but not all means of dispute resolution are “legal” in form or in acceptability. One of the tasks of a unified theory of dispute resolution will be to work the various alternatives means of dispute resolution into a consistent scheme. Sometimes physical violence is an appropriate means to resolve a dispute, other times not.6 Sometimes a dispute can be resolved by negotiation among the parties alone, other times not. Sometimes a dispute can be resolved by what Felsteiner calls voidance"^ (i. e. by the parties ceasing relations), other times not. Sometimes a party will make an alliance with a third-party, other times not.

This paper will focus upon the means of dispute resolution which is normally referred to by those speaking of “law” or “dispute resolution”: action by a third-party neutral with a view to end the dispute.

See, e.g. Auerbach, Justice Without Law? (1983) p. 145 and Hunter, “Economic Issues In Conciliation And Arbitration” (1977) 15 B.J.I.R. 226,233-4.

e.g. Criminal law recognises that violence may be acceptable in cases of defence of self or others or on provocation: Card, Cross and Jones Introduction to Criminal Law (1984) pp. 167-176 and pp. 436-439 while international law recognises a right of states to go to war in certain circumstances: Lauterpacht, (ed.) Oppenheim’s International

’ “Influences of Social Organization on Dispute Processing” (1974) 9 Law and SOC. Rev. 63,69. See also Hirschmann, Exif, Voice AndLoyalfy (1970) on “exit” (Chap. 2).

Law (1960) pp. 557-558.

482 THE MODERN LAW REVIEW [Vol. 52

Action by a neutral third-party with a view to end the dispute is the one aspect which courts, tribunals, inquiries, mediation, conciliation, and arbitration in all its forms have in common. Where these processes differ is over the role of the third-party neutral: what the third- party neutral does to end the dispute.

A great deal of confusion and inconsistent usage permeates the literature on “adjudication,” “arbitration,” “mediation,” “conciliation” and similar terms. Let us therefore define a few simple classes of process, which will allow discussion of the merits of different types of dispute resolution without confusion over the meaning of commonly-used names for the processes.

What distinguishes the various processes of dispute resolution and gives each its characteristics is what may be called its intrusiveness. Intrusiveness means here the extent to which the role of the third- party neutral is prescribed for the parties. Courts, for example, are the most intrusive form of dispute resolution: the parties must accept both the decision that the judge makes and the process by which the judge will reach the decision. Arbitrators are less intrusive than courts: the parties may provide by a reement for the process which the arbitrator uses to reach a decision but the arbitrator provides the parties with a decision. The least intrusive processes are those often called “mediation” or “conciliation”: while the third-party neutral may take control of the process (in scheduling meetings, leading dis- cussions, etc.), the ultimate decision on how to resolve the dispute is normally left with the parties themselves.

To summarise the alternative methods of dispute resolution to be discussed here, there are:

(1) Adjudicative (court-like) processes. Where both the decision to be made and the decision-making process are prescribed for the parties.

(2) Arbitrative (arbitration-like) processes. Where the third- party neutral controls the decision but not necessarily the

. decision-making process. (3) Negotiation Assistance (mediation and conciliation-like)

processes. The third-party neutral may take control of the process of decision-making, but not the decision made.

Thus, in deciding upon a form of dispute resolution, one must decide fundamentally on the intrusiveness desired-whether the decision, the decision-making process or both will be taken out of parties’ hands.

THE FACTORS In choosing the type of intrusiveness, or form of dispute resolution, one must consider:

8

~ ~~~ ~~~ ~~ ~ ~~ ~~ ~

Apparently this is quite common. Mustill and Boyd, The Law and Practiceof Cum- mercial Arbitration (1982) p. 58.


1: How private is the dispute? 2. Is the parties’ relationship worth saving? 3. Why have the parties been unable to agree without neutral

4. Are the parties individuals or organisations? 5. Can any form of dispute resolution resolve this dispute?

Such questions can only be answered from a complete knowledge of the parties, their needs and resources, the history of their relations, the history of the dispute and the roles of the parties in the com- m ~ n i t y . ~ On the basis of such answers, one can select an appropriate type of intrusiveness for the effects of that type of intrusiveness on the parties and their social environment. As explained in the previous section, selecting the degree of intrusiveness implies selecting a form of dispute resolution.

How PRIVATE Is THE DISPUTE? Although lawyers have classically spoken of “public law” and “private law” cases in adjudication, all adjudicative law is fundamentally public. Courts and tribunals act in public, according to social norms.” The adjudicators are normally appointed and paid by the state. When a party seeks to compel another party to accept an adjudicator’s decision, the compelling party must ultimately rely upon the actual or potential force of the state. The foundation of adjudication upon the power of the state or society is a major factor in the ability of the process to be as intrusive as it is.

Western societies put a high value upon freedom and autonomy of the individual.” The degree of intrusiveness in adjudication, in imposing a decision upon an unwilling party, cannot be reconciled with the value of individual autonomy unless this imposition upon the autonomy of one protects someone else’s autonomy. One possibility is that the other party’s autonomy is being protected: that will be addressed later in the section on power. The other possibility is that the autonomy of one or both parties is being interfered with to protect the autonomy of one or more third-parties not involved directly in the dispute.

Where the effects of a dispute or of its decision affects the autonomy of persons or groups other than the parties to the dispute, the intrusiveness of adjudication is justifiable and necessary to protect

help?

Compare, Walton’s,concept of “diagnosing the conflicts” in Interpersonal Peace- making (1969) p. 84.

lo This characterisation deliberately sidesteps the positive-realist debate over which social norms are “legal” norms. It is sufficient for our purposes that courts and tribunals apply some form of norms permitted by society to be applied in deciding cases, rather than the norms set by the parties’. Eckhoff, “The Mediator The Judge and the Administrator In Conflict Resolution” (1966) 10 Acta Sociologica 148.

I * The author explains how western concepts of individual autonomy create a need for adjudication in “Rights-Consciousness in Japan” (1984) 3( 1) Lawasia 66,6748.


the autonomy of the non-parties. Adjudication’s use of social norms to decide disputes provides an objective means of balancing parties’ and non-parties’ conflicting interests. The ‘‘natural justice” of the process of adjudication, in allowing all parties affected by a decision to be heard makes adjudication well-suited to assure non-parties an opportunity to defend their autonomy.

In contrast, the private nature of alternatives to adjudication makes them less able to protect the autonomy of non-parties to a dispute. In both arbitrative and negotiation assistance processes, the parties to the dispute normally choose the neutral. Thus the responsibility of the neutral is to the parties, in contrast to the adjudicator, who is completely independent of the parties. Arbitrative and negotiation assistance processes are normally held in camera, so that non- parties may not even know what transpires, let alone have any opportunity to participate. Arbitrative neutrals normally decide disputes according to norms agreed to or accepted by the parties, while in negotiation assistance the parties themselves decide the dispute, with no protection for non-party interests assured in either of these forms. Since both arbitrative and negotiation assistance processes are normally voluntary, the parties could simply refuse to participate in or to carry out a decision which protected non-party autonomy as against the autonomy of the parties.

Therefore, the less “private” a dispute is, the more the dispute or its resolution affects the autonomy of persons or groups other than the parties, the stronger the case becomes for the use of adjudication. One must know the place of the parties in the seamless web of the society in which they live in order to assess what if any persons or groups their actions do or may affect.

Is THE PARTIES’ RELATIONSHIP WORTH SAVING? Many commentators have remarked upon the fact that adjudication tends to destroy relationships among parties, while alternatives to adjudication tend to cement relationships. l2 Therefore, choosing between adjudication and its .alternatives in a dispute is implicitly a choice to aid or destroy future relations among the parties.

The intrusiveness of adjudication requires each party to compete with the other to persuade the neutral to decide in that party’s favour.13 Adjudication thus creates a structured combat among the parties,14 made more emotionally intense by the fact that the “los- ing” party may be coerced to act in favour of the “winning” party by

’’ e.g. Davet and Bogoch, “Fixed Fight or Free-For-All?” (1980) 7 Brit. J. Law & SOC. 36; Smith, “A Warmer Way of Disputing” (1978) 26 Am. J. Comp. Law (Supp) 205; Herrman, er al., “Mediations And Arbitration Applied To Family Conflicts” (1979) 24(1) Arb. J. 37.

l 3 Eisenberg, “Private Ordering Through Negotiation” (1976) 89 Harv. L. Rev. 637, 659-660.

l4 Davet and Bogoch, op. cir. note 12.


the court or tr ib~na1.l~ After the structured adversary combat by the parties one against the other and the adjudicatory decision for one and against the other, the parties often find it impossible to carry on amicable relations.

In contrast, many aspects of alternatives to adjudication tend to promote cooperation among the parties. First, unlike adjudication, where one party normally compels the other to participate, in non- adjudicatory processes the parties often must agree u on selecting the neutral or the agency which will appoint the neutral.P6 In arbitrative processes, the parties may have to agree upon certain aspects of the process, such as terms of reference. In negotiation assistance processes, many of the actions of the neutral tend to promote better communication among the par tie^,'^ to encourage parties to explore and surpass negative feelings toward one another,“ to, in Fuller’s words, strip messages of their “viruperarive” contentlg and to focus parties’ attention on the benefits of cooperation. Parties who are too hostile or adverse to carry on future relations would be unlikely to cooperate sufficiently to use the process, but any ability to cooperate would tend to be reinforced by these processes.

The most difficult decision in dispute resolution is this decision to cement or destroy a relationship. Unlike the effects of the dispute or decision on non-parties, which is an observable and verifiable fact, the decision to cement or destroy a relationship is a judgment. Yet it is a judgment made every day by default in our present method of allocating disputes to resolutioii by last resort, by ignorance, by myth, by tradition and by convenience. Some of the greatest tragedies in law occur when disputes in relationships which can be saved are adjudicated*’ and when relationships which are bad for one or both parties are patched up by arbitrative or negotiation assistance processes. Yet there are no easy formulae to make the decision: it is not true that all family relationships should continue or that all consumer-ven-

l5 Eisenberg, op. cit. note 13, at 654, calls this the “binary character of adjudication.”

The exceptions to this statement are (1) “unilateral” arbitration and (2) “compulsory” arbitration or conciliation. A party’s right to invoke unilateral arbitration is based either on a prior agreement of the parties or upon some “compulsory” aspect imposed by statute. “Compulsory” processes are, normally, so intrusive, in involving not only compulsory participation but also an imposed intervenor and imposed criteria for awards, that they really are more accurately forms of adjudication. “Compulsory arbitration” (or mediation or conciliation) is as much a legal oxymoron as “conclusive presuniption” or “implied intent of theparties.” ” Moon, “Conflict Management and The Law in a Technological World” (1978) 9

Vic. U. of Wel1.L.R. 121,132. By encouraging them “to speak freely, to reduce feelings and tension and . . . to

adopt a problem-solving approach to the resolution of their dispute,” ACAS, The ACAS Role In Arbitration And Mediation (1984) p. 9.

l9 Fuller, “Mediation-Its Forms and Functions” (1971) 44 US. Ca1.L.R. 305,324. 2o This has been most clearly recognised by family lawyers, e.g. Eekelaar, op. cit.

note 3. This also explains the traditional preference of commercial parties for arbitration in long-term relationships. See note 2.


dor relationships are transient, or that disputes in any class of relationships can be disposed of en musse on such bases. Nor are the pre- ferences of the parties, based, as they may be, in the heat of dispute or idealistic misconceptions of the realities, necessarily determina- tive.

The decision on submitting a dispute to a form of resolution which will be good or bad for future relations ought to be based ultimately on the ability of each party to meet the other’s needs without impair- ing the party’s ability to meet its own needs. The ability of a relationship to meet all parties’ needs consistently in this way will be a function of (1) the needs of the parties which they demand the relationship to meet and (2) the resources (financial, emotional, etc.) of the parties to meet one another’s needs. While the assessment of these factors in a specific case is a matter of judgment, the factors themselves-the demands of the parties and the resources available-are objectively-determinable facts.

If each party cannot meet the other’s needs consistent with meeting its own needs, then there is what Aubert’l and others call “conflict of interests.” If the parties have such a conflict of interests, no agreement can satisfy all parties. Therefore, with a conflict of interests, there is no basis for future relations among the parties and no harm in adjudicatory dispute resolution which destroys future relations. If each party can meet the other’s needs consistent with its own, then there is a prospect for relations satisfying to all parties, so arbitrative or negotiation assistance processes are appropriate to strengthen the relationship.

An alternative way of analysing relationships is in terms of Mas- low’s hierarchy of needs.” If the relationship meets both parties’ most basic needs-food, housing, health care, emotional security- the parties will find it impossible to do without the relationship. There is, therefore, a strong case for using arbitrative or negotiation assistance processes to strengthen relationships which meet both parties’ basic physiological or emotional needs. Yet, if the relationship is only concerned with the parties’ less basic needs, such as for self- actualisation or social belonging, the parties are better able to do without the relationship. A divisive adjudicatory procedure would do less harm in the “arms-length” or other relationship which does not meet the parties’ most basic needs, wherein the parties can better do without the benefits of the relationship.

WHY HAVE THE PARTIES BEEN UNABLE TO AGREE WITHOUT NEUTRAL HELP?

The number of relationship problems which can lead to a dispute is bounded only by the numbers of people in the world and the problems which they face together. The discussion in this subsection will

In Search ofLaw (1983) pp. 63-64. 22 Motivation And Personality (1954) Chap. 3.


not be exhaustive but will illustrate the general principle that each type of dispute resolution is suited to resolving certain types of relationship problems. The examples here will be from the sorts of problems often encountered in law or discussed in the sociology and social conflict literature.

(i) The Parties have Honestly Inconsistent Interpretations of a (Statutory, Judicial, Social, Contractual, etc.) Rule

Rule-interpretation is adjudication’s home ground. Adjudicators are trained professionals in rule-interpretation. The neutrality of the adjudicator, as well as training, helps to make it likely that the parties will accept the adjudicator’s interpretation. In such a situation, there is no way of avoiding deciding for one party and against the other, as it is by nature impossible to compromise on the meaning of a rule. The impossibility of compromise and the incompatibility of the parties’ interpretations both rule out any basis for negotiation among the parties, as in a negotiation assistance process.

An arbitrative process can provide an interpretation by a neutral but the neutral would have to apply decision-making criteria agreed by or acceptable to the arties. If the parties have not agreed in advance on such criteria? the parties would be unlikely to agree on criteria once a dispute has arisen, as the choice of criteria implies an outcome for the dispute. Also, an arbitrator may not have the expertise in rule-interpretation which an adjudicator has, as the arbitrator’s expertise is normally in the subject matter of the dispute rather than in “legal” arguments over the meaning of rules.24 Finally, the parties must agree upon the method of choosing the arbitrator: again, if this has not been done before the dispute arises, the choice of arbitrator may become embroiled in the dispute, as each party seeks to choose an arbitrator favourable to that party’s interpretati~n.~’

(ii) Interpersonal Problems Even if parties have a relationship which can meet their needs consistently, they still may be unable to relate amicably. One or both

23 Most commercial arbitration agreements are in contracts, in which the parties have already laid out the principles by which the dispute should be decided: Mustill and Boyd, op. cit. note 8, p. 75. Parties may also choose the law the arbitrator is to apply: Norske Atlas Insurance Co. Ltd. v. London General Insurance Co. Ltd. (1927) 43 T.L.R. 541 (K.B.); or empower the arbitrator to decide on general equities as an amiable compositeur: Eagle Star Insurance Co. Ltd. v. Yuval Insurance Co. Ltd. [1987], L1. Rep. 357 (C.A.).

24 For example, most arbitrators in British industrial arbitration are industrial relations academics: Rideout, “Unfair Dismissal Tribunal or Arbitration?” (1986) 15 I.L.J. 84,92-93, while in commercial arbitration they are “on closeprofessional terms” with the parties: Mustill & Boyd, op. cit. note 8, p. 220.

25 As has happened in the “scorecarding” of arbitrators in American industrial arbitration. See Lawson and Rinaldo, “Improving Arbitrator Performance” (1984) 39(4) Arbitration Journal 49. This has not happened in Britain because British collective agreements are not enforceable documents interpreted as rules.


parties may be hostile, insecure or even irrational in their actions. Where interpersonal problems are causing the dispute, negotiation assistance is especially effective in helping the parties to identify, con- front and resolve interpersonal problems. The managed confron- tation which is negotiation assistance has much in common with psycho-therapeutic techniques such as the encounter group, the “owning” and expressing of one’s feelings in a non-judgmental environment, and the identification and assertion of one’s demands and needs. The negotiation assister, as a trusted neutral, provides reality inputs to parties acting irrationally.26 The negotiation assister works individually with each party to help each party understand its own position and the positions of the other.27 Then, when the parties are ready to meet in joint session, the negotiation assister structures and chairs the meeting so as to help the parties identify and work through their problems in a cooperative way. Such analogies to psy- chotherapyZ8 make negotiation assistance capable of dealing with psychodynamic problems such as hostility and insecurity which psy- chotherapists deal with daily.

Neither adjudicative nor arbitrative processes have such psychoth- erapeutic attributes to deal with interpersonal problems. On the con- trary, adjudication tends to exacerbate interpersonal problems for the same reasons explained earlier, in discussing the effect of adjudication in poisoning relations among the parties. Arbitrative processes are normally limited to deciding a specific issue submitted by the parties: the arbitrator lacks juri~diction,~’ opportunity, and expertise to address interpersonal problems which may have produced the issue. Also, arbitrative processes, although often less divisive than adjudicative processes, still involve each party in a competition to persuade the arbitrator to decide as that party wishes. Thus, each party may be too concerned about the consequences of disclosing their motivations (in making the arbitrator’s decision more or less favourable) to disclose their feelings honestly.

(iii) Communication and Strategy Problems Negotiations sometimes fail for reasons not directly related to the issues or the parties. Sometimes problems arise in the negotiation process itself which prevent further negotiations. The parties may not be communicating effectively, so that the dispute may simply be a

26 Paterson, “The Agencies Which Can Help” (1974) 29 Bus. Law. 1023, 1024 “a ent of reality.” l7 See e.g. ACAS, op. cif. note 18, pp. 9-10, on the importance of these “side” meetings.

28 Note, by way of clarification, that these are analogies to psychotherapy only. It is not contended that negotiation assistance is psychotherapy or is a substitute for psychotherapy. See Kelly, “Mediation And Psychotherapy” (1983) 1 Med. Q. 33 on the distinction. Rather, negotiation assistance is relationship therapy.

29 As a matter of law, the arbitrator only has jurisdiction to do what the parties ask in their submission that he do: Owen v. Nicholl[1948] 1 All E.R. 707 (C.A.).


misunderstanding. One or both parties may be using a faulty strategy of negotiations, such as “blufJing,” failing to disclose necessary information, making proposals too late or too early, etc.

Regardless of the intrinsic benefits of the various processes, negotiation assistance would be the process of choice if only by a process of elimination. Neither adjudicative nor arbitrative processes contem- plate further negotiations by the parties: each envisions an end to the dispute in the decision made by the neutral. Therefore, neither adjudicative nor arbitrative processes address any communication or strategy problems in the parties’ negotiation. These processes address only the issues in dispute, regardless of their cause.

Negotiation assistance is the only process which addresses negotiation problems and has as a goal that parties will resolve their own issues through more effective negotiation. Negotiation assisters are above all else, experts in negotiation. They often act as helping the parties to develop their communication and bargaining skills. They work very hard to open channels of communication and build a dialogue among the parties.31 Thus, negotiation assistance processes are best situated to deal with communication and strategy problems.

(iv) InformationlOptions Problems In some disputes, the problem is neither in the parties’ relations nor over a specific rule. Sometimes the parties cannot resolve a problem due to lack of information, inadequate information, misinformation or lack of knowledge about available alternatives. In such cases, a dispute resolution process must provide the necessary information or options in order truly to solve the dispute.

Adjudicative processes provide no information on the parties- they only command a party to do or not to do a certain thing in respect of another party, e.g. to pay damages. As adjudicative rem- edies are normally prescribed, there is no flexibility for adjudicators to consider options objectively other than those prescribed for the type of case before them.

Negotiation assistance can provide information to the parties. Negotiation assisters often do help parties consider and weigh the merits of options.32 However, negotiation assistance is a party- centred process, focussing on helping parties to negotiate rather than gathering information, researching problems or developing options. Negotiation assisters do not necessarily have any more information or alternatives than do the parties with whom they work and thus tend

30 Paterson, op. cit. note 26, p. 1023. See also Veglahn, “Education By Third Party

31 Sander, “Varieties of Dispute Processing” (1976) 70 F.R.D. 79,115 defines “con-

32 Wolff, “The Best Interest of the Divorcing Family” (1983) 29 Loyola L.R. 55,70

Neutrals” (1977) 28 Lab. L.J. 20.

ciliation” as “facilitating communication. ”

(“facilitates the process of identifying and creating options”).


to concentrate on helping parties to decide on the information and options they already have.

Various arbitrative processes are better designed for garnering information to add to that possessed by the parties and for generating options not already considered by the parties. There are factfinding or inquiry processes, in which the neutral, often an expert in the area, researches the issues in dispute and considers what solutions are available.33 Arbitrators, too, to the extent that they are selected for their expertise or experience in the subject-matter of the parties’ rela- ti~nship:~ can have information and options which neither the parties nor more generalist negotiation assisters may be aware of. When arbitrators provide reasons for their decisions, they often seek to con- vince the parties, thus allowing the arbitrator to provide information to the parties and compare other options. Adjudicators’ reasons only accept one or the other party’s view of the facts and apply rules there- to. In summary, arbitrative processes have the best potential to solve disputes where the problem is inadequate information or the need for more options.

(v) Note of Caution It is quite difficult to determine, in an actual case, whether the problem in the parties’ dispute is a rule-interpretation, interpersonal, communication or information problem. Discerning among these problems requires very sensitive observation and understanding of the parties and their dispute. Any dispute, for example, may be recharacterised by the parties as a dispute over rules or rights under rules with a view toward adj~dication.~’ Parties lacking information or arguing over suboptimal alternatives may not realise that they are doing so and may appear to the outsider to be hostile, irrational or having faulty communication. Mischaracterising the problems underlying the dispute will lead to choosing the wrong method of dispute resolution. Yet even trying to analyse the dispute and sometimes getting it wrong is better than not trying to analyse the dispute, choosing by other means and often getting it wrong. Getting it wrong in choosing the method of dispute resolution means failing to solve the dispute and, often, making the parties’ situation worse.

ARE THE PARTIES INDIVIDUALS OR ORGANISATIONS? Individuals and organisations approach problems differently. The individual acts upon feelings, values and perceptions. The organisation tends to have a more political decision-making process, based

33 See Wedderburn and Davies, Employment Grievances and Dispute Procedures In

34 See note 24, supra. 35 Sarat and Grossman, “Courts and Conflict Resolution” (1975) 69(1) Am. Pol.

Britain (1969) (Chap. 11) on the use of inquiries in industrial relations.

Sci. Rev. 1200,1202 explain that this is essential to use adjudication effectively.


on balancing goals among internal power groups.36 Therefore the disputing process among individuals, often acting alone, is fundamentally different to the disputing process among institutions, often acting through negotiator^.^'

While many factors may determine the form of intervention appropriate to disputes among individuals (of the sort discussed heretofore in this paper), disputes where all parties are organisations tend to be best resolved in one way. The form of intervention must be suitable, in the dispute among organisations, to the political nature of the goals and internal decision-making processes of organisations.

Adjudication as practised in western societies tends to ignore the internal political processes of organisations and treat them as mono- liths. Partly for historical reasons3* and partly because disputes must be adjudicated by rules (demanding a single entity whose conduct can be judged by the rules), adjudication decides disputes involving organisations by the fiction of the “legal person.” Even when the fiction of the legal person is discarded, as in the “piercing ofthe corpor- ate veil,” the purpose is not to accommodate the internal balance of power among groups in the organisation but to find an individual whose conduct may be judged by the rules. In either case, adjudication’s approach to organisations is fictional, and must be so, as a process so intrusive as adjudication must be limited to rule-interpretation. If adjudicators were free to act independently of rules, they would have sufficient power to dictate the parties’ future.

Arbitration is commonly used in disputes among organisations, such as commercial or industrial arbitration. However, arbitration is generally agreed to and structured by the leadership of the organisations, and can be donc for the leadership’s own purpo~es.~’ Thus, for example, it is common for arbitration to be used to add credibility to the leaders’ decision^.^' Also, arbitration does not facilitate the political process of negotiation within and among organisations, as

~ _ _ _ _ _

36 Adopting the dominant “pluralist model“ of organisation theory: Hage, Theories of Organizafions (1980) (esp. p. 57) and Mitchell, People In Organizaflonr (1982) (esp. p. 517).

37 Walton, R. & McKersie, R., A Behavioural Theory of Labour Negotiation (1965) pp. 286-310.

38 Because, when the law of corporations, trade unions and voluntary associations developed, in the 19th century, the dominant model of the institution was the “classical” model based on a hierarchical “chain of command.” Therefore the organisation was thought of as an extension of the will of the person at the top of the hierarchy: Weber, The Theory of Social and Economic Organisation (1947) is the typical example.

39 Concannon, “Handling Dismissal Disputes By Arbitration” (1980) 9 I.L.J. 13, 15-16 noted the collective influences in employee grievance arbitration in Britain. In America, arbitration has been used by trade association leadership to enforce their policies against recalcitrant members: Kronstein, “Arbitration Is Powerl” (1963) 38 N.Y.U.L.R. 661.

As in the case of “consent awardr” submitted to American industrial arbitrators. Fuller, L., “The Forms and Limits of Adjudication” (1978) 92 Harv.L.R. 353,407.


the neutral gives an answer to the parties. For these reasons, arbitration tends to become a “crutch” for organisational relationships, with increasing1 more decisions lifted from the parties to the arbitration process.

Negotiation assistance processes have some advantages in dealing with disputes among organisations. First, as negotiation assisters are free to approach each dispute on its own terms, there is no need to use fictions. As experts in negotiation, assisters can help representatives negotiate among them~e lves ,~~ with the leaderships of their respective organ is at ion^^^ and even with constituent groups within the organisation,44 as well as with the representatives of the other organisations. As the assister does not make a decision the leaders of the organisations are less able to transfer responsibility for their decisions to the neutral than in other proce~ses.~’ As the assister is not given a narrow question to answer, and is an expert in helping parties to find ways to accommodate to their circumstances, he may be more sensitive, in helping the parties to frame a decision, to what is politically acceptable, both, within the institution and in the organisation’s possessive environment.

x

CAN ANY FORM OF DISPUTE RESOLUTION SOLVE THE DISPUTE?

Dispute resolution is a limited activity for limited purposes in a limited time and with limited resources. Openly recognising and expressing the limits of dispute resolution is a good antidote to the still-pervasive myth that law or dispute resolution, properly-applied, can “solve” any problem. Two of the most common cases, both ill- defined in existing literature, where underlying problems make any form of dispute resolution inherently ineffective are (1) where the parties are unequal in “power” and (2) where the “public interest” is involved in a dispute.

41 Stevens, C., “Is Compulsory Arbitration Compatible with Collective Bargain- ing?” (1966) 5 I.R.J. 38, calls this “the chilling effect.” His solution to it, ‘‘pendulum” (or, as he calls it, “final-offer”) arbitration, has problems of its own, as it seeks to for- estall use of arbitration by threatening an intolerable result. Thus, pendulum arbitration is properly called “sudden death” arbitration by American public sector ne otiators. The only effective solution is not to use arbitration in such cases. ’’ The International Labour Organisation, Conciliation In Labour Disputes (1973) pp. 51-52. Zack, Public Sector Mediation (1986) pp. 113-118.

43 Dunlop, Dispute Resolution (1984) p. 23. 44 Federal Mediation and Conciliation Service mediators have helped union and

management leaders “sell” their agreements, especially to recalcitrant union memberships which must, by law, approve collective agreements. Maggiolo, The Techniques of Mediation (1985) p. 103.

45 Although Stevens, Strategy And Collective Bargaining (1963) p. 126 does refer to American union leaders using mediation to “hoodwink” their memberships by making concessions while appearing to stand firm. As the leaders (and ultimately. under American law, the membership itself) are responsible for the outcome, rather than the mediator, such attempted chicanery can only fool those who wish to be fooled.


Power “Power” is another of the common terms used in a dispute resolution theory which means different things to different people.46 Here, power is used to mean a situation of inequality between the parties which leaves one relatively unable to defend its own interests.47 For example, the parties may have unequal strategic or bargaining skills, leading the better bargainer to get the better There may be an inequality of information, leading the better-informed party, or the party with more expertise in the subject-matter, to get the better

There may be an inequality of assertiveness, leading the more-assertive party to get the better deal.” There may be an inequality of alternatives to the relationship, so that the party with fewer alternative ways of meeting its needs must concede on the terms demanded by the other party in order to meet its needs.51 There may be an inequality in the importance of the relationship to each party where the relationship meets one party’s basic physiological or emotional needs and only the self-actualisation or social needs of the other party. In such a case, the party whose more basic needs are at stake will have to concede to the party who can more easily do without the relationship, in order to continue the relationship and meet its own needs.

Experience shows that, regardless of the form of dispute resolution or the nature of the dispute, any outcome will disproportionately

~~ ~ ~

46 Compare, for example, the concepts used by Etzioni, A Comparative Analysis of Complex Organisations (1975) p. 4 (“an actor’s ability to induce or influence another actor to carry out his directives or any other norms he supports”); Douglas, Industrial Peacemaking (1962) pp. 7-8 (“table power,”i.e. bargaining skills allowing a favourable agreement for a party) Chamberlain, A General Theory of Economic Process (1951) pp. 220-221 (“bargaining power” in the sense that the “cost of disagreement” exceeds the “cost of agreement”).

47 As Cross, The Economics of Burgaining (1969) pp. 16-17 notes, the problem with the traditional concepts of power (exemplified in note 46) is that they confuse the outcome of power with its existence. In other words, one only knows who the powerful party is when one knows that one party has forced the other to do its bidding: Thus, the traditional concepts are somewhat circular. The approach of this paper focuses on the conditions of inequality which either gives one party greater potential to influence the outcome or induces one party to settle on another’s terms: thus, the definition of power in this paper looks to the causes of power rather than merely describing its results.

48 As in the “table power” referred to by Douglas, op. cit. note 46. See also Schell- ing, Thestrategy of Conflict (1960) pp. 22 etseq.

49 Parliament has recognised this form of power and sought to redress it by the duty to disclose information in industrial bargaining provided in the Employment Protec- tion (Consolidation) Act 1978, ss.17-21 and by allowing damages for misrepresentation relied upon by the innocent party regardless of intent of the misrepresenting party in private contracts: Misrepresentation Act 1967 s.2.

McClintock, C. (ed.), Experimental Social Psychofogy (1972) p. 325, Fisher, R. and Ury, W., Getting to Yes (1981) pp. 8-10.

This is analogous to monopoly power in economics. The monopolist can impose a price on the consumer because there are no alternatives. Competitive firms do not have this power and must be “price-takers” because consumers can go to a competitor if the price offered is above the market price.


benefit the party which has the benefit of power. Negotiation assistance is not sufficiently intrusive to change the power relations among the parties: as a negotiation process, the party with advantages in negotiation maintains these advantages in determining the outcome of negotiation a s~ i s t ance .~~ While the negotiation assister has some theoretical potential to help the disadvantaged party,53 e.g. by instructing the party in negotiating skills or providing information which the disadvantaged party lacks, there are features of the process which mitigate against use of even this limited potential. First, the negotiation assistance process is voluntary-the advantaged party can withdraw from a process which deprives it of its advantage. Secondly, the negotiation assister’s training and disposition is to win confidence of both parties and to be scrupulously ne~tral .’~ The assister would most likely not act for the benefit of the disadvantaged party even if action were possible. Finally, as indicated in the section on interpersonal disputes, negotiation assistance tends to encourage good feelings of the parties toward one another and discourage hostile feelings. When the parties are in a position of equality, discouraging hostility helps both parties-but when the parties are unequal, one effect of reducing hostility may be to induce the disadvantaged party to accept a settlement disproportionately advantageous to the advantaged party.55

Arbitrative processes, as creatures of the parties, tend to build in the advantages of inequality among the par tie^.'^ The parties must normally agree to choose the process, upon a selection procedure for the neutral, on terms of reference and perhaps on some procedural aspects of the process. When the parties are unequal the advantages of that inequality in negotiation per se persist in the negotiations to structure arbitrative processes. Therefore, when parties are unequal, inequality taints the whole arbitrative process and can structure the process to benefit the advantaged party disproportionately. The neu-

52 Abel, (ed.), The Politics of InformalJustice (1982) pp. 32-33; Folberg andTaylor, Mediation (1984) p. 4; Salem and Davis, “Dealing With Power Influences In the Mediation of Interpersonal Disputes” (1984) 6 Med. Q. 17, 24; Bethel and Singer, “Mediation” (1982) 7 Vermont L.R. 15,19.

53 Salem and Davis, ibid., pp. 20-21; Douglas, op. cit. note 46. 54 Thus, ACAS conciliators in dismissal and discrimination cases will not take a

“more positive role in assisting individual complainanfs” because this may compromise the agency’s impartiality: ACAS, Annual Report 1985 p. 82.

55 Indeed, there is evidence that this has been a major effect of conciliation in dismissal claims: Dickens el. al., Dismissed (1985) found that conciliated settlements are one-half the tribunal awards on average (p. 162), that 42% of employers settled “to save money” (p. 146) and that 70% of the settlements were the employer’s first offer (p. 174).

56 Kronstein, op. cir. note 39; Note, “Commercial Arbitration” (1968) 52 Minn.L.R. 1218; Stone, “The Post-War Paradigm In American Labour Law” (1981) 90 Yale L.J. 1509, 1550-1565; Hunter, as cited at note 5 (counting ACAS “mediation” as an “arbitrative process” because the mediator proposes a solution rather than helping the parties to reach their own solution).


tral has no jurisdiction to exceed the terms “agreed” by the parties:7 even if the neutral should be aware of the inequality and seek to redress it.

Adjudicative processes, as the most intrusive and independent of the parties, have the greatest potential for redressing inequalities of power. Yet in practice, adjudicative processes seem no better than the alternatives in dealing with unequal parties.” As Galanter sug- gests, classical adjudication is a technical process which is best used by those who are experienced “players.”59 As sociological writers suggest,60 the adjudicators may carry social or ideological biases which lead them to perceive the advantaged party as right. Yet merely the attempt to be neutral may be sufficient to leave the power in the relationship where it lies. Traditional adjudication, moreover, puts the burdens of the process61 on the party seeking protection from the courts or tribunal: the burden of initiating the process, the burden of producing sufficient evidence of the sort required to persuade the neutral, the “ultimate” burden of proof, the burden of enforcing the judgment once delivered. When the advantaged party does not need the protection of the court or tribunal it has the benefit of inertia-of winning because the status quo has been maintained. When the advantaged party seeks the protection of the court or tribunal, advantages of resources, assertiveness and information make it easier for the advantaged party to meet the necessary burdens and win. Only when adjudication has been deliberately structured to protect the disadvantaged party, rather than to appear neutral, has adjudication had any success in protecting the interests of the disadvantaged party.62

Public Interest One of the few writers on “The Public Interest” calls this a “vacuous, deceptive and generally useless term.”63 Again, “public interest”’is an

57 See note 29. s8 Some examples include: (1) the Industrial Tribunals, who only find one-fourth of

dismissals “unfair”; Williams, K., “Unfair Dismissal” (1983) 12 I.L.J. 157,159; (2) the compulsory arbitration, by the Central Arbitration Committee of terms and conditions for the low-paid in 1959-80, which mostly benefited white-collar workers; Jones, “Cen- tral Arbitration Committee and Schedule 11” (1980) 9 I.L.J. 28; and (3) the dilemma of American courts between enforcing housing standards laws and rendering the poor homeless or ignoring the standards and leaving the poor in substandard housing, Frie- lich, “Housing Code Enforcement and Abandonment” (1975) 8 Urb. L. ix.

59 Galanter, “Explaining Litigation” (1975) 9 Law and SOC. Rev. 247. Harris, Infroduction To Law (1980) pp. 106-108 and pp. 146-147; Kidder, Con-

necting Law And Society (1983) pp. 83-109. 61 Wexler and Effron, “Burden of Proof and Cause of Action” (1984) 29 McGill L.J.

468,469. 62 As in, for example, the Unfair Contract Terms Act 1977, Sched. 2(a) of which

explicitly tells the court to look at the relative bargaining power of the parties in deciding the Iegality of a term! Lawson, “The Unfair Contract Terms Act” (1981) 131 New L.J. 933, 935 comments that “in all the cases” under the Act “tbe consumer bus emerged victorious.”

Held, The Public Interest And Individual Interests (1970) p. 1.


example of a dispute resolution term which needs an agreed definition.

There is a sense in which the effects of a dispute upon the autonomy of persons or groups other than the parties are “public” effects, with which society as a whole is concerned. In this sense, the arguments about the merits of dispute resolution in protecting “non-parties,” earlier in this paper, apply to the “public interest.”

The problem with “public interest” as it is normally used, which makes it “vacuous, deceptive and generally useless,” is that politicians use the term to dress up their own goals in the garb of what is necessary for the people at large. When public interest is used in this way, it is a totally illegitimate concept, no more thatl a demand from the politicians that the autonomy of the parties to the dispute be sacri- ficed for the benefit of the politicians. Such a demand merits no con- sideration in dispute resolution.

Yet, if ignoring the politicians’ self-serving concept of public interest is the optimal course, it is a course which is not always open, especially in regard to public interest as defined by politicians in power. If a dispute attracts the interest of the state, this sets up a con- frontation between the desires of the parties and the desires of those who control the state. Regardless of the method of dispute resolution, when the neutral is obliged to consider the public interest as defined by the state, the public interest generally prevails, with the party whose goals are most consistent with that of the state being the most successful.64 In such cases, the dispute cannot be “resolved” by the neutral except insofar as state policy and goals permit. Dispute resolution in “public interest” disputes becomes merely an exercise in implementing public policy.

When an adjudicator is required to decide disputes according to the public interest the adjudicator must balance the wishes and autonomy of the parties against the goals of public policy. The very need to balance, plus the fact that the ultimate duty and orientation of the adjudicator is to society, not the parties, leads to the goals of the state being protected against the desires of the party whose desires are most inconsistent with the state’s goals.6s

The choice for arbitrative and negotiation assistance is whether it

61 Some examples include the Australian “arbitration” of wages; Mitchell, “Austra- lian Industrial Relations and Labour Law Policy” (1980) 52 Aust. Q. 40 (holding down wages in the public interest); American arbitration of public sector disputes: Weitzman and Stochaj, “Attitudes of Arbitrators Toward Final-Offer Arbitration In New Jersey” (1980) 35(1) Arb. J. 25 (holding down wages in the public interest) and British experience with “inquiries” before 1979: “Monkeying With Wages.” Economist (Feb 13, 1971) pp. 13-15 (pushing up wages for the public interest in industrial peace).

Perhaps the best example of this is the tendency in most common law countries over time for adjudicators to limit non-pecuniary loss compensation in the public interest of holding down the costs of compensation; Effron, J., “Non-Pecuniary Damages” (1988) lO(2) Houston J. Int. Law. 211,234-238.


will be a subterfuge to frustrate public policy66 or a means of enforcing ublic policy in which the parties lose confidence and cease to useJ7 The subterfuge, of course, can only continue for so long as the state is tolerant or unaware of it.

CONCLUSION This paper has demonstrated that it is possible to integrate adjudication and its alternative forms of dispute resolution into a consistent scheme. Each method of dispute resolution has advantages and dis- advantages for each type of dispute. Choice of a method of dispute resolution can and should be based upon these advantages and disad- vantages, related to relevant aspects of the parties and their dispute, rather than any preconception that one method is “law” and the others are “first resorts” or “lust resorts.” Such an approach offers a more effective use of all dispute resolution processes as well as a more realistic understanding of the role of adjudication and legis- lation in law.

Such a demonstration is only a beginning. This paper has shown that a unified theory of dispute resolution is possible and desirable. Now the challenge goes out, to other scholars and practitioners in law and other social sciences of human conflict, to develop and implement an integrated effective approach to conflict resolution.

JACK EPPRON*

As ACAS and the C.A.C. were used as subterfuges to avoid incomes policy in the 1970s, Dickens et al., “Resolving Industrial Disputes” (1983) 14(2). Ind. Rel. J. 6 ,8; Wood “The CAC‘s Approach to Schedule 11 of the Employment Protection Act 1975 And the Fair Wages Resolution 1946” (1978) 7 I.L.J. 65.82.

67 As happened to the Department of Employment Conciliation Services in the 1960s, which the parties perceived as linked with the enforcement of incomes policy; ACAS, Annual Report 1975 pp. 4-5.

*Lecturer, School of Commerce, Griffith University, Queensland.

ALTERNATIVES TO LITIGATION: FACTORS IN CHOOSING

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