Third Party Conflict Resolution Paper Essay

Alternative dispute resolution refers to any method for solving disputes other than by litigation. It is a constrictive dispute resolution method to the extent that a decision by such a method cannot be overruled by a public court of law. A public court of law cannot also give awards different from the ones issues by the method. The two most common used methods of alternative dispute resolution are arbitration and mediation. These methods mainly include evaluation of a case that is done on neutral basis, negotiations, conciliation, mediation and finally arbitration. Alternative dispute resolution methods are becoming preferable due to the need to move away from crowded courtrooms, increasing litigation costs, and the delays experienced in courts before judgment is delivered. These reasons have compelled many people across the states to favor alternative arbitration programs. Some of these programs are voluntary while others are mandatory.

One of the most informal processes used is mediation. In this form of informal litigation, mediators pair the opposing sides and try to control the process. Mediators are trained personnel who are trained to work out settlements and tries to influence accept or reject decisions. This process is also favored since the parties agree amongst themselves and come up with a resolution unlike a court where a judge is influenced by many factors.

Arbitration on the other hand is a basic model of trial that has limited detection and the rules of evidence are simplified. An arbitral panel regulates the process and makes the final decision. Both sides under dispute appoint the arbitrary panel members. The two sides may decide to appoint one person to serve as an arbitrator or they may appoint two people to represent each side and then the two people select a third person to the arbitrator. Arbitration hearings are quite longer than mediation hearings. A typical hearing can take from two days to a week. During that period, the panel convenes a few hours a day to deliberate on matters discussed earlier. After all facts have been delivered based on the arbitration standards, the panel delivers its verdict in a written decision or through an arbitral award. Opinions in this case are not treated as public records.

Arbitration is mostly used in place of industrial courts to solve matters in industries such as construction and securities regulation.3 The process is gaining popularity and more people are adopting it to solve their disputes. Arbitration agreements are enforceable under federal and state laws. The agreements and awards derive their powers from Title 9 of the U.S. Code. The code bases on Congress plenary power that oversees interstate commerce. Title 9 on itself is more superior to state law. A substantial number of states, approximately forty-one in the United States have adopted the Uniform Arbitration Act. The original version was formed in 1956, while the revised version was done in year 2000.

Amendments to Alternative Dispute Resolution Process
Every year, many transactions take place in the construction scene. Intermittently, some disagreements arise in the course of this transactions hence the need for arbitration since litigation may cost both parties significantly. This is in addition to the privacy, fairness and promptness of the process.4 When a dispute occurs, the opposing sides may submit their grievances for arbitration. The arbitrators are supposed to be impartial and any conflicts of interest are unethical. According to the American Arbitration Association, the arbitration process has four major rules: the regular track procedures, the procedures for the resolution of disputes through document submission, and the procedures for large complex construction disputes. These rules provide guidelines whenever there is a dispute particularly in the construction sector.

The best way to avoid intervention by the courts as much as possible is to employ institutional arbitration, which provides a framework that can establish an arbitral tribunal and activate the process despite any disagreements or problems that arise. Thus, the institution can appoint arbitrators, make decisions on disqualification, see to the smooth operation of the procedure and the meeting of deadlines, set arbitrator compensation (which is a very tricky undertaking when the parties deal directly with the arbitrator without going through an institution) and set parameters for the award, as required and in accordance with pre-established conditions.

Initially, the United States Code governed alternative dispute resolution processes. It was amended in 1998 to provide for some features due to the advent of time. The amendments allowed all districts to adopt the provisions of the Act under Section 2071 (a). The amendment also gave powers to neutral evaluation, ministerial, mediation, and arbitration as means of solving civil cases. This was provided under Section 654 to 658 (Clare, 2003). The Act provides for a new statutory payment regime, which introduces a right to interim or periodic payments and a final payment and requires an adequate mechanism in a contract for determining what will become due and when. Default provisions are provided for, which automatically apply in the event that no adequate mechanism is provided in the contract and requires the payee to give a ‘payment claim notice’ to the payer of what is to be paid and how it is calculated not later than five days after the payment date.

The payer may not reserve funds unless it has given a rejoinder (akin to a pay-less notification) to the payment request notice, stating the amount it intends to delay from the sum due and the reasons for doing so not later than 21 days after the repayment claim date as stipulated in the contract or the Schedule. Receivers may suspend enforcement when the sum due is not paid by the closing date for payment. Consequently, there is a prohibition on contractual terms that make payment subject upon the payer being reimbursed from a separate source (‘pay when paid clauses’). Persons to whom the Act touches will need to be cognizant of the truth that if the agreement does not provide for a sufficient mechanism for payment when the statutory default payment provisions will apply.

One goal of a ‘pay when paid’ clause usually used in the construction business was to exempt the contractor from liability to compensate the subcontractor until the employer had settled it. The outcome of this kind a contractual condition was to enable the contractor to pass the danger of default by the employer to its subcontractors further down the construction chain. The application of these clauses is now forbidden by section 3(5) of the Act. The only exception to this ban is in case that there is a related bankruptcy event in a construction contract. In cases where the employer is solvent, a ‘pay when paid’ clause in a contract between contractor and subcontractor will not permit the contractor to withhold payment from the subcontractor. While the legal validity of such terms may be questionable in practice, engineers and architects acting for employers have been required to observe them.

Suspension for Non-Payment
Persons not receiving payment in full now have a new statutory right to suspend work under the Act, provided proper notice and particulars are given. The provisions appear to entitle a payee to suspend performance of any or all of its contractual obligations related to the work. There are hopes that the right to suspend will be limited to the actual construction obligations or also, for example, extend to suspension of the right to insure the works or suspension of works in related areas connected with the payment in dispute. Partial payment will not suffice to render suspension unjustified. It will be important to make sure that any seven-day advance notice is clear and served in accordance with the Act’s requirements.

Works can be suspended, but only up until such time as where the payment dispute is referred to adjudication or where full payment has been made of the amount due. Much weight will have to be given to the fact that contracts may also need redrafting to allow payees to suspend in accordance with their entitlement under the Act. The Act expressly states that the period of suspension is to be disregarded for the purposes of contractual time limits. To ensure that the contract provisions and time for completion are not thwarted by the operation of the Act, a review of current contractual conditions is strongly advised.

For the first time, the Act has introduced a statutory settlement procedure for the settling of payment disputes. Both parties will be permitted to discuss a payment dispute under the agreement to a mediator, whose judgment is required within 28 days (which period may be extended by a further 14 days by agreement between the parties).14 This is not the case in the UK, alternative dispute resolution under this Act will only apply to a payment dispute. The Act does not exactly describe what institutes a payment dispute and it is well known that it is stated in the Act to be “any dispute relating to payment”. It will be motivating to see how this will function in practice and if guidance is given in the Code of Practice concerning payment disputes once the Code is published.

The Act specifies that the arbitrator’s award is obligatory until reversed by another formal process. The opposing parties are required to conform with the decision of the arbitrator, even if they plan to go to court or arbitration proceedings. This will aid in avoiding any deferral to payment. Certainly, the Act provides for a further right to suspend in situations where one party fails to honor (within seven days) any sum due pursuant to the decision of the adjudicator. The opposing parties in such legal proceedings by this means may remove any implied confidentiality or ‘without prejudice’ can depend upon the judgment of the intermediary protection as would say relate to the intermediation process. Definitely, this will have an impact on a verdict by a party on whether to refer the issue on to arbitration or to the courts, if it is likely that a court or arbitrator would be unwilling to obstruct the arbitrator’s judgment unless justified in the circumstances.

In fact, the Act specifically agrees the arbitrator to use his or her “ingenuity in determining the facts and the law”, if he or she so wishes. An arbitrator’s judgment will be requisite even if it is wrong and the Act explicitly provides that an arbitrator may not reconsider or re-open any characteristic of the decision. It is therefore significant to defend parties that settle on all important terms and conditions in your contracts clearly and in advance in order to reduce the potential for any payment dispute arising at the outset.

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In the negotiation process, the use of third-party conflict resolutions often comes into play when parties cannot seem to reach an agreement regarding resolving mutual interests. These types of third-party conflict resolutions are: arbitration, collaboration, litigation and mediation. For the Seatcor Manufacturing Company, the use of third-party conflict resolution is necessary.

The researchers of Team A have reported collaborative ideas of this case by (1) analyzing the possible intervention strategies, (2) applying what is thought to be the best strategy, (3) explained how the best strategy should resolve the conflict, and (4) developed a contingency plan in case the best strategy does not work, or is rejected. Intervention strategies Possible intervention strategies include negotiation, mediation, arbitration, litigation, collaboration and hybrids.

Two types of hybrid intervention strategies are mediation – arbitration and arbitration-mediation. Negotiation – There are four elements to the negotiation process, which include managing interdependence, engaging in mutual adjustment, creating or claiming value, and managing conflict. Negotiations consist of two or more parties be that individuals, groups, or organizations. A conflict of needs and desires exist between parties and the parties chose to negotiate. Parties expect a “give and take” process that is fundamental to the definition of negotiation itself. The parties prefer to negotiate a resolution on their own and seek a mutually beneficial outcome.

A successful negotiation includes consideration of the tangibles and intangible aspects of an agreement. Tangible aspects involve the price and terms of a contract, while the intangible consider the feelings of the participants. • Mediation – The objective of mediation is to help the parties develop and endorse the agreement they can live with. Here a third party, the Mediator assists in identifying areas of dispute and searches for compromises in those areas from both sides. Mediation has become a popular low-cost solution to litigation, especially for divorce cases.

Since the Mediator has no formal power, the participants have the greatest say in shaping the terms of the settlement. This of course only works if the parties are open to the process, as most cases are voluntary. • Arbitration – Arbitration allows negotiators to have considerable control over the process but little control over the outcome. Outcomes in arbitration can be voluntary or binding. In voluntary arbitration parties are not required to comply with the arbitrator’s decision, but are by law or contractual agreement in binding decisions.

Some decisions are left almost entirely to the arbitrator’s discretion, while others in “final-offer” arbitration must be selected from previous chosen outcomes presented by the parties. Arbitration is the most widely recognized intervention strategy because of its use in labor relations and professional sports. • Litigation – Parties utilize this strategy when they do not share common goals and interest. Litigation also allows parties to draw the process out as long a possible. This type of strategy may be beneficial when changes over time may be advantageous to a party.

The draw- back is the outcome typically does not concede to any middle ground. Therefore, this strategy is more distributive in nature in that usually only one party gets what they want. • Collaboration – In collaboration, parties seek cooperation and seek solutions advantageous to both parties. This win-win strategy assertively utilizes the fact that both parties have common goals. Parties identify common ground and search for areas of agreement. • Hybrids – Mediation-arbitration is a complementary and facilitating strategy for final-offer arbitration.

Because in mediation the parties expect a compromise, the parties may choose to wait for the arbitration rather than make concessions during mediation. Arbitration-mediation another hybrid approach which has three stages. First, the arbitrator holds a hearing and reaches a decision” which is placed in a sealed envelope and is not revealed to the parties” (Conlon,Moon and Ng, 2002, p. 979). Mediation occurs at Stage 2. If an agreement is not reached, in Stage 3 the arbitration ruling is revealed and is binding on both parties Mediation as the Best Strategy

The best strategy for the third party conflict resolution is mediation. Mediation is a dispute resolution process, in which a neutral third party assists the participants in reaching a voluntary and informed settlement. Mediation and diplomacy have both been used frequently. There are many options available for dispute resolutions. People have a tendency to assume that parties who have a dispute cannot work together to resolve the dispute, and this assumption does both parties a disservice (Hajdin and LeMoncheck, 1997).

Many hostile environment complaints arise as a result of differences in perception about what is humorous or flattering and what is offensive. Some disputes arise as a result of one person’s failure to respect the other or to understand the effect of ones behavior on the other. If the parties are open to communicating with each other, these complaints can be mediated and resolved. By using mediation managers and business owners can potentially save the company’s relationship with other internal and external customers.

Innovative companies, such as Seatcor are investigating management and production systems that emphasize informed participation, decentralized authority and expanded responsibility. Therefore, in this type of dispute resolution, it is important that Joe, as the manager know the laws, policies, and procedures governing Seatcor. This knowledge is required so that Joe could fulfill his responsibilities, protect the organization from costly legal action, and provide a respectful work environment for all. Our next step should be to seek the acceptance of the idea of mediation from Joe and Charles.

Mediation can mend and restore frayed working relationships, even when the parties are very angry at each other. Finally, we should put as much effort as possible into the investigation and resolution of the incident, including supporting Charles, and recommending or implementing mediation that will expose problems and give alternative actions for resolving the dispute. Mediation Resolves Conflict. The use of mediation in a dispute is one of the interventions used to resolve conflicts. The parties will actively participate in this process because of his or her stake in a resolution.

The agreement reached is ultimately between the two parties and is not imposed. However, this does not mean that a mediator is limited to his or her personal opinion about a dispute. Because a mediator is to remain impartial and neutral, the mediator is to separate his or her opinions from the disputants and focus on unbiased ways to help the parties resolve the conflict on their own accord. The mediator is the overseer of the process and his or her job is to assist the parties in various ways such as:

• Opening lines of communication Exploring solutions to the problem or examining the problem from a variety of viewpoints • Educate the unskilled or unprepared negotiators on the bargaining process • Help build a reasonable and implementable settlement • Question and challenge parties who have extreme or unrealistic goals (Purdy, K. , 2001-2009) Mediation is a voluntary process. The parties agree to mediate in good faith. Ethics play a major role in the mediation process. Being honest is a crucial component, as is the full disclosure of the facts of the dispute.

Both parties are asked to keep the information disclosed in the mediation succession confidential. Many mediators will destroy their notes once the process is complete. Mediation requires that each party respect the other. Some mediators are trained as attorneys; however, they are not allowed to give legal advice. As a mediator, one is expected to stabilize the setting by being polite and by displaying that he or she is in control of the situation. This will help the parties feel comfortable.

Each party is given the opportunity to vent his or her concerns about the conflict without expressing emotions of anger, accusations, or frustration. The mediator’s goal is to assist the parties in reaching an agreement should the process become geared toward a stalemate. The final step of the mediator’s goal is to clarify any agreements reach by the parties involved. This should change the party’s attitude toward each other once these settlements are in place. With these measures set in place, mediation should resolve the conflict.

Contingency Plan Mediation has been chosen as the plan of action to resolve this Third-Party Conflict Resolution between Joe and Charles. During Step three and four of the Mediation Process if mediation does not work collaboration would be the contingency plan coming from the Sr. VP of Operations here at Seatcor. He feels that collaboration will help Joe and Charles bring a resolution to their issues. Knowing that Joe is going to retire in a couple of years, The VP of Operations insisted that Joe hire Charles who is very well trained and bright.

The VP of Operations is also aware that Joe’s motive of operation was to hire people who were minimally competent and most lacking managerial skills. However, in order to reach the desired outcome and both disputants experiencing a win-win resolution they will have to learn how to work together to reach Joe’s five year goal for the plant’s proposal to be presented to senior management. Joe especially, would have to take Charles’s position seriously, because as Senior VP of Operations and Chief Operations Officer, Charles was hand picked to replace Joe upon his retirement.

Charles’s ability to take over the reigns from Joe is heavily dependant upon their ability to cooperate, collaborate, and work together. Joe hasn’t been able to build trust in Charles, therefore leading to the conflict. Several reasons may have contributed to the trust issues, for instance Joe was probably threatened by the fact that Charles was younger and more educated than most of the staff he hired, and the fact that Charles was selected by us. To help Joe and Charles get over this hurdle we will work on integrating and collaborating problem solving techniques.

By building on the interests of both disputants we will be able to redirect their focus and narrow it on the issues at hand, point out areas of disagreement, and assign joint projects to help them work collaboratively. Joe will be able to take Charles under his wings, as a protege rather than an adversary, and show him the ropes of the business. We believe that by making the plan for the plant a joint effort with different tasks, and by redirecting both Joe and Charles’s focus it will help change the way Joe sees Charles and minimize the conflict.

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