Dispute Resolution Guide

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Selection Criteria For Dispute Resolution

Produced by Dispute Resolution Services

Department of Justice, Canada

The goal of any dispute resolution process is to bring closure to a dispute on terms that are responsive both to the nature of the dispute and to the objectives, needs and interests of the parties. The process itself and the final resolution must have legitimacy and authority. As well, the outcome must be durable. The key to achieving this is appropriately matching a dispute to a resolution process, whether litigation or any of the dispute resolution mechanisms in the dispute resolution spectrum. While the term Dispute Resolution ("DR") is generally used to describe all possible methods by which to resolve a dispute, ranging from negotiation to litigation, this document will focus on the process of selecting cases for resolution by means other than litigation; DR is therefore used in this document to describe dispute resolution mechanisms other than litigation.

Choosing a DR mechanism requires that a selection process be undertaken. This process involves two basic questions: is the dispute appropriate for resolution by DR other than litigation?; and if so, which DR process is most appropriate for the particular dispute? In answering these questions, the analysis of the practitioner must focus on the particular nature of the dispute, as well as the objectives, needs and interests of the parties. The relative merits of a particular process must be determined in the context of the dispute in question.

The goal is always efficient and effective resolution.

Targeted questions must be asked in order to ensure that the DR process chosen is the most appropriate. It is often the case that certain factors weigh both for and against the use of DR as well as for or against a particular DR process. Further, it is possible that more than one process is suitable for resolving a particular dispute. The final choice will be determined by a variety of factors, including the specific requirements of each case, the interests of the parties and the past DR experience of both parties and practitioners. The following selection criteria are designed to provide a general guide to matching a dispute to the appropriate resolution process. No criterion stands alone or is definitive. All criteria must be taken together and will serve to assist in the practitioner's judgment on the best forum for a dispute.

Dispute Resolution Services of the Department of Justice has also prepared a series of practice modules in respect of several of the DR processes discussed in this document. They are available to provide a more detailed discussion of the nature and use of these processes.

Suitability of cases for DR

Not all cases are suitable for resolution by DR. The decision to use DR should be made on the basis of a range of factors including how to best serve the specific interests of the parties and ensuring that justice is accessible, efficient and effective.

The earlier a DR mechanism is introduced in a dispute, the more effective it is likely to be in resolving that dispute. The longer a dispute continues, the more parties tend to become entrenched in their positions. Vindication becomes an increasingly important motivation. Further, both the financial and emotional costs continue to escalate.

However, in certain instances it is not until the parties have been able to gather and analyze all the available evidence that they can make a fully informed decision as to how to proceed with a case. Therefore, while a DR mechanism is arguably best utilized as early as possible in the dispute, the fact that it has not does not bar its availability as an effective means of resolution in later stages.

DR should be thought of as a complement to litigation, rather than simply as an alternative to it. For example, the introduction of DR mechanisms into a court action can often be effective in cases which have been stalled in the courts for an extended period with little or no progress toward resolution, or in cases which turn on questions of monetary damages.

As the use and awareness of DR increases, an increased acceptance of and even a demand by parties for DR can be expected. In all instances where a party to a dispute either agrees to use a DR mechanism, or specifically requests its use, other parties must be able to respond with informed suggestions for the choice of a particular mechanism or with well-considered reasons to reject the use of a DR process.

With these points in mind, the following non-exhaustive list is designed to provide general assistance in evaluating the DR potential of a dispute:

DR is likely to be suitable where:

• a definitive resolution with precedential value is not required; that is, the dispute will follow established precedent rather than be relied on to create new precedent
  
  
• the dispute does not require statutory interpretation for resolution; however, the distinction should be made between issues requiring application of an existing and accepted interpretation and those requiring interpretation of a statute that has not been previously interpreted or that requires interpretation in a new context
  
  
• the parties want to avoid the time and cost of litigation
  
  
• protection of privacy and confidentiality, to the extent possible under the Access to Information Act and Privacy Act, is important to the parties
  
  
• a full public record of the proceeding is not required
  
  
• the procedural safeguards offered by the courts are not required to protect the interests and rights of the parties
  
  
• the dispute involves technical issues which the courts may not be able to provide the expertise to adequately address without the additional time and expense of using expert witnesses
  
  
• the parties have been involved in similar disputes in the past and do not require the definitive resolution of the issues, but rather an evaluation of their cases in this particular context
  
  
• the parties have indicated their willingness to consider settlement, or have attempted settlement on their own but have failed
  
  
• one or more of the parties has requested or suggested exploring dispute resolution options other than litigation
  
  
• the remedies available in and the process prescribed by a court do not address the needs or demands of the parties and do not effectively address the cause of the dispute
  
  
• continuing relations between the parties is an objective which would be jeopardized by the adversarial nature of litigation
  
  
• the settlement of the dispute does not affect the interests or rights of individuals who are not parties to the dispute

Choosing a DR process

Having decided that a case is appropriate for DR generally, the choice of a specific DR mechanism must follow. One or more of the available options may be suitable, depending on the particular situation. The goal is to select and design a resolution process that most directly and meaningfully responds to the needs of the parties and that most appropriately addresses the nature of the dispute. Following are criteria that may be applied in consideration of four dispute resolution mechanisms that are most common in the literature and in practice.

Arbitration

Arbitration is likely to be appropriate where:

• the parties want a greater degree of control over the dispute resoultion procedure than is available in the courts
  
  
• the dispute involves technical matters which would benefit from the presence of a decision-maker with relevant expertise or knowledge
  
  
• past attempts to negotiate a settlement have failed and the parties have rejected further attempts at negotiation
  
  
• the parties have become so entrenched in their positions, or are so emotional and hostile toward each other, that a negotiated settlement is unlikely and the decision of a neutral arbitrator is required to break the stalemate
  
  
• vindication is important to one or all of the parties, and the relative formality and finality of arbitration proceedings addresses this need
  
  
• the parties have differing views of the facts of the dispute and differing interpretations of the applicable law, thereby requiring a more adjudicative form of dispute resolution
  
  
• credibility is at issue, requiring a relatively higher degree of formality of procedure than other non-litigious DR processes
  
  
• the parties are willing to risk the effects of an adjudicative process on their continuing business relationship
  
  
• a definitive resolution of the dispute with precedential value is not required; that is, the dispute will follow established precedent rather than be relied on to create a new precedent
  
  
• litigation is likely to be lengthier and more expensive than the arbitration process

Mini-Trial

A mini-trial is likely to be appropriate where:

• the parties want to maintain or improve a business relationship, or circumstances require that the parties will be working together following the resolution of the dispute
  
  
• the parties want to maintain a greater degree of control over the process of dispute resolution, including designing a process that adequately addresses their specific needs and goals
  
  
• representatives of the parties with sufficient knowledge of the dispute and who have sufficient authority to settle the dispute are available to participate in the process and willing to commit the time and effort necessary to effectively do so
  
  
• the dispute is in litigation and is at a stage where significant additional costs are anticipated, such as those for examination for discovery
  
  
• the issues in dispute are of a technical nature, and the presence of experienced representatives of the parties will facilitate resolution of the dispute
  
  
• issues are in dispute which would benefit from presentation to and discussion with decision-makers responsible for implementation or development of that policy
  
  
• a definitive resolution with precedential value is not required, or the avoidance of a possible adverse precedent is an important factor
  
  
• litigation of the dispute would likely be lengthy and expensive
  
  
• the parties are not entrenched in adversarial positions in which vindication is the motivating factor for one or all parties

Early neutral evaluation

Early neutral evaluation is likely to be appropriate where:

• the dispute involves technical matters and the presence of a neutral with relevant expertise would make presentation of the case easier and result in an evaluation/opinion which would have greater credibility/legitimacy to the parties
  
  
• the parties are seeking an alternative to lengthy and comprehensive discovery, or the facts relevant to the dispute are agreed upon and lengthy discovery is not required or desired
  
  
• the dispute is in litigation and is at a stage where significant additional costs are anticipated
  
  
• there are numerous claims for relief and assessment by a neutral evaluator would assist in the clarification or simplification of the dispute
  
  
• one or more of the parties has an unrealistic view of the strengths of its case or disagree significantly on the value of the case
  
  
• the parties have become relatively entrenched in their positions, or are so emotional and hostile toward each other, that a negotiated settlement is unlikely and the non-binding opinion of a neutral arbitrator is required to attempt to break the stalemate
  
  
• the parties will continue a business relationship following the dispute
  
  
• issues of credibility are not key to the resolution of the dispute, thereby not requiring formalized procedure including for example, sworn testimony or full cross-examination to ascertain the truth
  
  
• a definitive resolution with precedential value is not required; that is, the dispute will follow established precedent rather than be relied on to create a new precedent
  
  
• litigation of the dispute will likely be lengthy and expensive

Mediation

Mediation is likely to be appropriate where:

• lack of communication between the parties has given rise to the dispute or has prevented the dispute from being resolved, and restoring or establishing open communication is seen as a way to promote settlement
  
  
• the parties have relatively equal bargaining power (note: consider the possibility of co-mediation in cases of unequal power)
  
  
• the parties need to express their emotions to allow them to focus on the specifics of the dispute itself, rather than on their own personal feelings; that is, a mediator could help diffuse the hostility which is a barrier to settlement
  
  
• the parties are interested in settling or exploring settlement options, but are not able to do so without outside assistance
  
  
• the dispute requires a creative or tailored solution that is not available through traditional adjudicative processes
  
  
• the parties are not entrenched in adversarial positions in which vindication is the motivating factor
  
  
• the parties want to maintain a greater degree of control over the process of resolving the dispute, including designing a process that adequately addresses their specific needs and goals
  
  
• the parties want to maintain or improve a business relationship, or circumstances require that the parties will be working together in the future
  
  
• a definitive resolution with precedential value is not required, or the avoidance of a possible adverse precedent is an important factor
  
  
• litigation is likely to be lengthier and more expensive than mediation
  
  
• issues other than those of pure quantum or liability exist, so that creative problem-solving can be usefully applied to the resolution of the dispute
  
  
• issues of credibility are not key to the resolution of the dispute, thereby not requiring a formalized procedure providing, for example, testimony on oath or full cross-examination

Conclusion

The traditional courtroom approach to dispute resolution can be criticized on a number of fronts: the backlog of cases makes it impossible to provide efficient service; the courts are often too expensive to use; the structure and procedure of courts are alienating to many people who use them; the remedies which a court can provide are limited and may not adequately address the needs of all parties or the reasons for the dispute; judges may lack the technical expertise to effectively resolve certain disputes; and the focus on vindication through adversarial processes disrupts continuing relations between the parties.

Similarly, DR can be criticized on a number of fronts: decisions have no precedential value; decisions are not always binding; disputes and decisions to resolve them are often removed from public scrutiny; enforcement of decisions may be problematic; DR processes lack pre-set procedural safeguards; costs of some forms of DR may rival those of litigation; DR may not adequately address issues of power imbalances among parties.

Dispute resolution options exist and a selection process must be undertaken to choose from among the range of these options each time a dispute arises. The potential for a dispute to be resolved by the most appropriate process available, ranging from traditional litigation to any of the DR mechanisms, must be assessed on a case-by-case basis. The key to delivering effective dispute resolution is to recognize that every dispute involves a unique combination of conflicts, concerns, interests and objectives that must be measured against the ability of a particular resolution process to most effectively address and satisfy them.

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