Topic 6 : Third Party Dispute Resolution

Topic 6 : Third Party Dispute Resolution

1. Impasse

   • Where a negotiation process comes to a halt
   • Factors
     • Interest of both parties aren't fulfilled
     • One party does not has the intention to reach a settlement
     • Settlement pressure
     • Both parties heavily defend their position

2. Mediation

   • Private dispute resolution that received assistance from a third neutral party to facilitate the resolution of the issue
   • Approaches
     • Collaborative = Mediator disclose both parties' point of view and create ZOPA to discover potential solution
     • Evaluation = Mediator meet each party separately and act as middlemen for both parties to communicate
     • Directive = Both parties sit together at the table, but only on side is allowed to talk while the other listen. The process goes on until settlement is reach
   • Functions
     • One who 'set the ground rules' = specify what rules that is going to be govern the process
     • Ringmaster = the person who direct the negotiation process
     • Educator = using own expertise and knowledge to educate the best solution
     • Communicator = act as the middlemen for both parties to communicate between one another ; Evaluation Method
     • Innovator = create a unique solution
   • Benefits
     • Psychological = doesn't force settlement to the parties thus doesn't burden them
     • Saving time & money compared to arbitration & litigation
     • Focus on issue
     • Both parties has control over the settlement
     • Confidentiality

3. Arbitration

   • Both parties had agreed to settle their dispute as stated in the contract by arbitration whom has the authority to make the final and biding decision
   • Disadvantage
     • Playing God = Arbitrator tend to be fact-oriented and decision-oriented
     • Chilling effect = where both parties reduce their effort to negotiate as whatever is disclose going to be used for the final decision
     • Surface bargaining = parties are intentionally declare impasse to induce arbitration
   • Type
     • Conventional = where the arbitrator makes the final decision based on own perspective
     • Final-offer = where the arbitrator choose one of the parties' offer
     • Combined = where the arbitrator combine both offers made by the parties

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