Court Proceedings and Alternative Dispute Resolution Methods - Essay Example

CONFLICT RESOLUTION Student’s Name Course Professor’s Name University City (State) Date Conflict Resolution Introduction Disputes are ubiquitous phenomena in any business setting, whether on the domestic or international level, or on matters touching on consumer or commercial aspects of the business. Needless to mention, disputes are harmful to any business. Consequently, dispute resolution is very important for various businesses domestically and across the world. The business world is generally acquainted with a number of dispute resolution methods, including court proceedings and other alternative dispute resolution (ADR) techniques. Examples of alternative dispute resolution methods include negotiation, mediation, early neutral evaluation (ENE) and arbitration (Davenport & Parker 2012). Each of the methods of dispute resolution is known for its particular advantages and limitations. However, numerous studies and research findings continue to assert that alternative methods of dispute resolution are much better for solving disputes in both local and international business, when compared to court proceedings. Court proceedings can portend negative outcomes that are injurious to any form of business (Rothstein et al 2014). Court Proceedings Conflict resolution through court proceedings is what is commonly known as litigation. In instances where very large sums of money are involved, court proceedings are often pursued. Litigation compels all the involved parties to participate in the final solution (Evans 2014). Litigation basically starts when a case is filed with the courts, in which regulations governing procedure and presentation of evidence are strictly adhered to. Following court hearings, either the jury or the judge determines the solution to the presented dispute in behalf of the parties. In appropriate instances, the loser of the court ruling is permitted to appeal the court decision in a higher court (Rothstein et al 2014). Furthermore, in certain scenarios, the loser in the court proceedings pays the lawsuit as well as the attorney fees of the rival party. Litigation is involuntary, and the defendant has no choice but to take part in the court proceedings (Rothstein et al 2014). The proceedings are also structured and formal with rules of procedure and evidence presentation. All the parties involved in the court hearing are presented with the chance to provide evidence, arguments and to cross-examine one another. In addition, the court records and proceedings are open to the public, with final decisions based on the law (Davenport & Parker 2012). As has been mentioned above, such court decisions can be binding and final. Litigation as a method of conflict resolution in business can be beneficial in a myriad of ways. Firstly, litigation can create a precedent which prevents future offenders from evading justice. Furthermore, court proceedings can conveniently delay or halt the escalation of the controversial issue until the court arrives at a decision (Davies 2015). According to Picco and Rifkind (2014), apart from exposing fraudulent and unfair business practices for public scrutiny, court cases are also useful methods of emphasizing the seriousness of a business concerning the issue in question. On the other hand, court proceedings in business conflict resolution can be quite disadvantageous. Court proceedings, for one, often require a lot of time and money (resources). The decision of the courts is based on evidence. The process of gathering evidence can take a long time with court cases often dragging on for months and years as business operations are effectively retarded (Picco & Rifkind 2014). Court cases also require a lot of money, such as in attorney fees, evidence gathering, servicing law suits, and so on. Such losses of time and money for businesses are unprofitable even as the resulting damage to reputations from court cases scare away consumers and investors, and dent the public image of the business (Davenport & Parker 2012). The Volkswagen Group, for example, has suffered serious losses in the wake of the numerous court proceedings and arrests following the diesel-gate scandal of 2015. Moreover, court cases commonly heighten conflicts in the heated court arguments and lawsuits, making it difficult for previously useful business relations to be restored. Court action as a method of dispute resolution in local and international business thus do more harm than good to businesses through the loss of time and resources, damage to reputations, and loss of important partnerships and relations for businesses. There is also no guarantee that the decision of the court (which could hurt a business) can be overturned through appeals (Evans 2014). Alternative Dispute Resolution Arbitration is a form of alternative dispute resolution in which one or more arbitrators listen to the facts surrounding a given dispute and then provide a decision (Picco & Rifkind 2014). The arbitrator can be a retired judge or an impartial individual with professional knowledge on the particular issue. Although it is less formal than the process of litigation, the decision of the arbitrator is also binding as is the case with the court ruling. Arbitrations are more private when compared to court proceedings and offer better flexibility in terms of scheduling (Beatty and Samuelson 2012). Another commonly employed alternative method for dispute resolution in business is mediation. This basically entails a mediator who facilitates deliberations amongst the disagreeing parties through methods that encourage more objective and friendlier discussions that would have otherwise been impossible. Similar to arbitrations, mediations also allow for privacy (lowers the negative impact of conflict on the public perception businesses) and are useful avenues for preserving important relationships in business since a healthy discussion between the parties is facilitated (Davies 2015). Mediation is not designed to point out who is wrong and who is right, but rather to solve a dispute via an agreement that is mutually agreed and arrive at by both parties. Mediation enables the parties to listen to one another’s perspectives, present own ideas and explain the fairness in such ideas, develop various alternatives for settling the dispute, and to decide if the conflict can be resolved in a manner that is better than the original proposals (Gibson & Fraser 2012). The final agreement between the two parties is then put down in writing and signed by the mediator and both parties for future references. There are a plethora of different benefits of using such alternative methods of dispute resolution as arbitration and mediation, over litigation/ court proceedings. In business, time is money, and can determine whether or not a venture is able to stay/ position itself ahead of competition (Beatty and Samuelson 2012). According to statistics, ADR strategies when implemented early in the disputes can yield positive resolutions months and even years earlier than when litigation is used. Besides the time issue, the use of ADR methods for businesses saves a lot of money which is lost in litigations through the loss of working hours and payment of fees for experts and lawyers (Picco & Rifkind 2014). Litigations take longer to arrive at decisions and the longer the duration of settlement, the higher the costs incurred by businesses. Inevitably, this translates to loss of profit and slowed growth of businesses both domestically and abroad. Also, alternative dispute resolution methods like mediation enables the parties to remain in control of the process of resolution and the final decision, unlike in litigations where control and decision making are left to the lawyers and the courts (Evans 2014). Furthermore, because of their private nature, confidentiality is maintained through ADR mechanisms, especially in cases pertaining to sensitive corporate data. This is important for businesses in terms of retaining their operation tactics and in preserving their reputation (maintaining their market share). Through such alternative methods, important relationships and partnerships, such as employer to employee relations, are conveniently preserved so that the business does not lose ground following a dispute. Through such alternative mechanisms, it is possible to sift through complicated facts with the aid of industry professionals and experts, instead of litigations which consist of lay and non-expert juries (Gibson & Fraser 2012). In addition, international disputes in business can be resolved amicably and issues agreed on in advance, instead of having to cope with the jurisdiction of courts that are foreign during international litigations (Beatty and Samuelson 2012). The common emotional burdens and workplace distractions that are commonly imposed on people involved in court proceedings is also minimized when such out of court settlements are involved. Conclusion Generally, both court proceedings and alternative dispute resolution methods present different pros and cons for businesses. Court proceedings have their own benefits when used as methods of dispute resolution. However, a careful discourse of their limitations for businesses reveals the need to explore alternative methods such as mediation, arbitration and negotiations. It is therefore not true that court proceedings are more effective methods of dispute resolution for domestic and international businesses when compared to alternative approaches. In fact, numerous studies have linked litigation with damaged business reputations (businesses thus perceived as controversial and unethical), loss of privacy and control, as well as loss of time and resources which are important for businesses (Gibson & Fraser 2012). Litigation should be the last resort for businesses both local and abroad in case alternative mechanisms fail to bear fruit (Davies 2015). Reference List Beatty, J. F., & Samuelson, S. S. 2012, Essentials of Business Law, Australia: South-Western Cengage Learning. Davenport, S., & Parker, D. 2012, Business and Law in Australia, Pyrmont, N.S.W.: Thomson Reuters (Professional) Australia. Davies, A. C. 2015, Employment Law, Harlow: Pearson. Evans, M. D. 2014, International Law, New York, EstadosUnidos: Oxford University Press. Gibson, A., & Fraser, D. 2012, Business Law, Frenchs Forest, N.S.W.: Pearson Australia. Gibson, A., & Fraser, D. 2013, Introduction to Business Law, Sydney: Pearson Custom. Picco, G., & Rifkind, G. 2014, The Human Face of Conflict Resolution, London: I.B. Tauris. Rothstein, M. A., Craver, C. B., Schroeder, E. P., Shoben, E. W., & Hébert, L. C. 2014, Employment Law, Eagan, MN: Thomson Reuters. Read More