Negotiation is a method of presenting and reviewing proposals in a legal context until an appropriate offer is made and accepted. Negotiation can be seen in the wider community as a process through which two or more parties conduct communications or conferences in order to resolve differences between them. While the law proposes formal dispute resolution procedures, the majority of the negotiations are informal, and the participants may not even realize that they are involved in the negotiation process. Jennings et al (2001) suggest that the theory of negotiation encompasses a wide range of phenomena and uses several different approaches (such as artificial intelligence, social psychology, and game theory). We argue that it should be obvious that there is no uniformly best approach or strategy for automated negotiation, given the wide variety of possibilities. Rather, there is a diverse collection of approaches with properties and output characteristics that vary considerably depending on the context of the agreement. Alternative Dispute Resolution (ADR) pushed the resolution of conflicts away from lawsuits and trial. This pattern is expanded by the electronic dispute resolution (ODR) (Clark, Cho & Hoyle 2002). Information technology has opened up new ways to resolve disputes, particularly the Internet.
Controversy is a part of business life. Either between buyers and sellers, producers and suppliers, managers and workers, or business and government, when the interests of different parties clash, conflict is inevitable. There is no way to avoid confrontation. In fact, business people often benefit from conflict because it can lead to energy, motivation, productivity, and creativity. The task is to handle conflict so as not to hinder progress, or worse, to ruin your ability to achieve your business goals. Whether the conflict is within or outside a corporation (a dispute in the workplace or a conflict between business divisions) (a dispute with a supplier or a regulatory agency) business people need to proactively intervene in conflicts until they escalate if an enterprise is to stay on track and execute its plan. Traditionally, companies have treated conflicts in a variety of ways, usually with little planning or coordination. The issue is usually passed on to the Department of Human Resources regarding problems in the workplace, if it is dealt with at all. Problems are often overlooked until they get more extreme for buyer / seller conflicts, and then partnerships are terminated or lost to rivals. A case is often triggered if any issue escalates beyond the point where it can be overlooked. Nevertheless, once the decision to go to court is taken, costs and tempers can spin out of control quickly.
More and more executives, administrators and general counsel come to recognize the inefficiencies inherent in the court settlement of conflicts. Fuelled by research into successful negotiation and a desire to create a more productive way of resolving conflicts, an increasing pool of skilled dispute resolution has provided an alternative to the judicial system that allows disputing parties to settle their disputes much more quickly and effectively. Parties can resolve their disagreements in weeks rather than years using mechanisms such as mediation, arbitration, and expert evaluation. Discussions are confidential, parties may determine how much influence they want to have over the procedure, and typically participants are far more satisfied with the outcome than they would have been if they had wanted to go to court. The parties can choose the person they want to act as their impartial facilitator, usually selecting someone who is informed about the topic of the conflict, saving endless hours of informing a judge for the parties. In complicated, trans-boundary situations, dispute resolution helps parties to resolve their issues without having to pay for endless legal analysis of which country’s law applies to each aspect of the dispute.
Alternative dispute resolution (ADR) is widely recognized as being open to procedures that are alternatives to conventional legal dispute resolution approaches (Charlton, 2000). Astor and Chinkin (2002) also recognize that a simple dividing line between ADR and traditional justice systems is difficult to achieve, as many courts have implemented their own ADR version. In Australia, the National Advisory Council on Alternative Dispute Resolution (NADRAC, 2003) states, “ADR applies to mechanisms other than judicial arbitration in which a neutral individual allows those in a dispute to resolve the issues between them.” The principle of pursuing an ADR instead of a formal authority decision has a long history. Sander (1976), in which he introduced the idea of the “Multidoor Courthouse,” profoundly influenced the current ADR movement. Many scholars have commented (Meadow, 2017; Astor & Chinkin, 2002) that ADR has become a proven alternative to litigation for disputants. Ross (1980) notes that “the key institution of the law is not a trial; it is an out of court settlement.” This assertion is confirmed by recent data from a study in the Netherlands. Approximately 48 percent of all disputes have been settled out of court and only 4 percent of disputes have been settled). In the U.S., Williams (1983) states that while the numbers can vary in different jurisdictions, only about 5 percent of the cases mentioned before the courts are ever heard by the judge, and only 1 percent of the cases result in judicial decision-making. Nonetheless, judicial decision-making has a significant influence on the outcome of negotiated agreements, as judicial decisions act as the very basis on which negotiations begin, taking place in the shadow of a court’s interference (Williams 1983).
The ADR movement has revolutionized the essence of dispute resolution practice, away from an adversarial paradigm to a collaborative one. Disputants have the option of treating their disputes differently, with the goal of creating win – win options for the disputants rather than the distributive win-lose results found in court. Some of ADR’s most cited benefits, particularly mediation, include: efficiencies; the ability to preserve party relationships; promoting active party involvement and not creating precedent value. Research by Astor and Chinkin (2002) showed that ADR is particularly successful in resolving disputes in the fields of commercial law, family law and employment law. ADR and arbitration are fundamentally different dispute resolution approaches. Many ADR procedures are concerned with bargaining and offsetting trade, while litigation is primarily concerned with justice. Although there is a huge variety of ADR options (Brown & Marriot, 2011), three specific types of litigation can be identified: negotiation, mediation and adjudication (arbitration and litigation).
Folberg and Taylor (1984) describe mediation as “a mechanism by which parties, with the assistance of a neutral person or persons, systematically identify contested issues in order to establish options, consider alternatives and arrive at a negotiated solution to meet their needs.” In Australia, NADRAC (2003) developed its own concept of mediation as “a mechanism in which the parties to a conflict recognize the contested issues with the assistance of a neutral third party (the mediator), discuss options, consider alternatives and attempt to reach an agreement.” A mediator does not have an advisory or determinative function with respect to the nature of the conflict or the result of its resolution, but may advise or decide the mediation process, which is the steps and stages involved in the process by which it is attempted to settle (Charlton, 2000). It has been argued in recent years that mediators can determine the substance of the conflict, while they mainly facilitate the agreement between the parties (Riskin, 1996). Most often, mediation is a cooperative and non-binding mechanism in which a neutral third party allows the parties to devise their own dispute resolution. It is a private procedure in which confidentiality is covered by an arrangement or law (such as in Australia) between the parties and the mediator. The fundamental difference between negotiation and mediation is the participation of an objective, neutral third party who is not a party to one of the participants but rather helps all or all of the parties reach an agreement (Astor & Chinkin, 2002). Mediation is not necessary for all or all conflicts. The parties must be willing and able to do what is expected of them by the process (Astor & Chinkin, 2002). Capacity ensures the parties are capable of expressing and bargaining for their own needs and interests.
When there is a history of violence between the disputants, mediation is strongly discouraged. According to Pryles (2002), mediation may be compulsory for example, mediation is mandatory in many Australian jurisdictions (Alexander, 2004), optional (in the sense that it can be performed at the discretion of a particular person) or voluntary (the parties to the conflict can voluntarily agree to attempt mediation). Arbitration is an adversarial method whereby an independent third party (or parties) makes an award binding on the parties after hearing the representations of the parties. An arbitrator may be part of a scheme annexed to the trial, or the parties may appoint an arbitrator not actually legally qualified. The arbitrator’s choice may be based on his or her specific expert knowledge of the subject matter, such as an engineer or accountant. Arbitration is a method that is most often associated in the public mind with mediation. The method of arbitration could be as close as possible to judicial decision (Charlton, 2000).
Arbitration is an ADR procedure used since European settlement in Australia. The English Arbitration Act 1697 provided a process by which parties to a civil action could refer their case to arbitration and enforce the assured award as a court judgment. The creation of the Australia Institute of Arbitrators in 1975 established an arbitral identity formation and arbitrator preparation professional organization (Astor & Chinkin, 2002). Arbitration is an enforceable mechanism that is often subject to law enforcement control (Astor & Chinkin, 2002). Australia’s arbitration law is based on international conventions, federal and state laws, as well as common law. Mediation and arbitration are both mechanisms of ADR, but they have distinct goals and values.
Astor and Chinkin (2002) suggest that mediation morality lies in optimum compromise in which each party abandons what it values less, in exchange for what it values more. Arbitration truth rests in a judgment under contract law. In Australia, a court may not set aside or remit an award under the Commercial Arbitration Act on the grounds of mistake or fact or laws on the face of the award. In general, mediation is considered more economical, more effective and more versatile than arbitration (Astor & Chinkin, 2002).
Digital dispute resolution (ODR) draws from ADR systems such as consultation, mediation and arbitration its main themes and concepts. The word online is a specific definition not of the subject of the conflict, but of the process or resolution. This includes both online delivery of ADR’s traditional methods and online dispute resolution directly between the parties themselves. Solovay and Reed (2003) argue that ADR is being adapted to the online environment in three main ways: (a) Offline ADR professionals, particularly mediators, use the Internet to increase their practices; (b) ODR providers set up online shops and transfer ADR processes completely online, making the necessary changes to suit the online environment; and (c) The technical choices on the Internet have developed ADR processes that are specific to the online environment. In the context of dispute resolution, ODR introduces a “fourth party” (Katsh & Rifkin. 2001) at the table, which is the technology that works with the mediator or arbitrator. Katsh and Rifkin (2001) suggest an assumption that a “space for dispute resolution” serves as a vehicle for dispute resolution that is interested in opportunities to repair and improve relationships and settle transactional disputes. In order to negotiate commercial disputes, most of the current ODR sites were developed. CyberSettle, SquareTrade, and ClicknSettle are examples of this. Rule (2002) notes that much of their electronic mediation initiative is now based on “hybrid” processes where face-to-face meetings are combined with online tools to create an overall process that is more efficient and effective. While trying to adapt conventional systems of arbitration, mediation and negotiation to the online environment, the Internet has already spawned its own developments in ADR. Some of these approaches seem to facilitate and simplify the settlement of disputes, such as blind bidding and computer-assisted negotiations.
ODR provides disputants with the opportunity to use both synchronous and asynchronous media. For example, in a synchronous model, the contestants can use online messaging or video conferencing devices to bring geographically distant contestants into cyberspace to ensure that the contact is still live and in real time. The disputants rely on delayed method of communication, such as protected email systems, in an asynchronous model. ODR’s most distinctive feature of ADR is its ability to provide asynchronous contact.
Conley Tyler and Bretherton (2003) suggest that asynchronous resources like bulletin boards are favored by most agencies. Rule (2002) claims that there are many benefits to ODR that boost ADR. Although arbitration also benefits from the online environment, it is particularly useful for negotiation and mediation. One such example is pre-communication reframing. Another such example is pre-communications reframing. Helping parties interpret their correspondence in such a way that they can explain their position more clearly to their critics is an essential component of moving a conflict towards a resolution. In the context of the concurrent caucusing process, Rule (2002) states that while some mediators during mediation sessions avoid caucus with individual parties, others rely heavily on it. When pushing parties towards a settlement, the ability to discuss problems with one side in a confidential way can be extremely valuable. Rule (2002) also suggests that caucusing can be a blunt device in face-to-face mediation sessions, but typically the mediator has to call a halt to the joint conversation and then determine which of the parties should first caucus. The other faction is then sent out to wait while the first hand of the mediator caucuses. Digital dispute resolution encourages the mediator throughout the mediation to vote, even if the negotiation is going well (Rule 2002). When the communication between the parties is restored, most disputes can be resolved. Conflict partners have often stopped communicating or only communicated through their attorneys. If there is any communication between the parties it is likely to be focused on legal positions or are even “naming and blaming”. Reestablishing fruitful communication, communication that is focused on interests and not on (legal) positions, is a vital element of negotiation support systems (Fisher & Ury, 1992). In our approach to ODR, we believe it is important that: (a) Disputants have a realistic assessment of what will happen if the negotiations fail; (b) Disputants receive support to allow them to express their wishes; (c) Disputants receive decision support to enable them to participate in trade-offs.
In many Western jurisdictions, ADR has become a proven form of litigation to resolve disputes. In particular, the application of ICT to the Internet technology in the ADR process has created a new alternative dispute mechanism that offers fast, effective and possible dispute resolution without face-to-face meeting. Support systems for negotiation can offer users an optimal solution rather than a solution. After researching ODR characteristics and exploring our approach to designing improved ODR systems, we suggested a three-step method to construct ODR systems. This process involves: (a) determining an appropriate BATNA; (b) attempting to address current conflict problems using dialog techniques; (c) using compensation / trade-off approaches to advice on potential timing and dispute resolution for those issues not resolved in b).
Integrating and designing an application that provides the dispute with an effective and sufficient BATNA is a promising approach to the development of new ODR systems, and given the complexity and heterogeneity of day-to-day living disputes, it is certainly a challenge.
References
Alexander, N. M. (2004). Global Trends in Mediation. Kluwer Law International B.V.
Astor, H., & Chinkin, C. M. (2002). Dispute resolution in Australia.
Bol, S. H. (2003). Ethan Katsh and Janet Rifkin, Online Dispute Resolution, Resolving Conflicts in Cyberspace. Artificial Intelligence and Law, 11(1), 69-75. doi:10.1023/b:arti.0000013403.91418.92
Brown, H. J., & Marriott, A. L. (2011). ADR Principles and Practice.
Charlton, R. (2000). Dispute Resolution Guidebook. Lbc Information Services.
Clark, E., Cho, G., & Hoyle, A. (2003). Online Dispute Resolution: Present Realities, Pressing Problems and Future Prospects. International Review of Law, Computers & Technology, 17(1), 7-25. doi:10.1080/1360086032000063084
Fatima, S. S., Wooldridge, M., & Jennings, N. R. (n.d.). On Efficient Procedures for Multi-issue Negotiation. Lecture Notes in Computer Science, 31-45. doi:10.1007/978-3-540-72502-2_3
Fisher, R., Ury, W., & Patton, B. (1992). Getting to Yes: Negotiating Agreement Without Giving in. Boston, MA: Houghton Mifflin Harcourt.
Folberg, J., & Taylor, A. (1984). Mediation: A Comprehensive Guide to Resolving Conflicts Without Litigation.
Menkel-Meadow, C. (2017). Dispute Processing and Conflict Resolution: Theory, Practice and Policy. London, England: Routledge.
NADRAC. (2003). National Alternative Dispute Resolution Advisory Council,. Retrieved from http://www.law.gov.au/www/disputeresolutionHome.nsf
Pryles, M. C. (2002). Dispute Resolution in Asia. Kluwer Law International B.V.
Psychological Sciences. (n.d.). Research Into Online Alternative Dispute Resolution- Exploration Report Prepared for the Department of Justice Victoria. Retrieved from http://www.psych.unimelb.edu.au/icrc/exploration.pdf
Riskin, L. L. (1996). Understanding Mediators’ Orientations, Strategies, and Techniques: A Grid for the Perplexed. Mediation, 137-181. doi:10.4324/9781315204826-6
Ross, H. L. (1980). Settled Out of Court: The Social Process of Insurance Claims Adjustment. AldineTransaction.
Rule, C. (2003). Online Dispute Resolution For Business: B2B, ECommerce, Consumer, Employment, Insurance, and other Commercial Conflicts. Hoboken, NJ: John Wiley & Sons.
Sander, F. E. (1976). Varieties of Dispute Processing.
Solovay, N., & Reed, C. K. (2003). The Internet and Dispute Resolution: Untangling the Web. Law Journal Press.
Williams, G. R. (1983). Legal Negotiation and Settlement. West Group.