The Gentle Art of Agreement Making
By Theodore W. Kheel
Despite increased public interest in conflict resolution and alternative dispute resolution (ADR), the meaning of these terms is often unclear. Although most people think conflict resolution means solving conflicts peacefully, “conflict resolution” actually includes any method of resolving disputes, even war.
When speaking about conflict resolution and alternative dispute resolution, many use the words “conflict” and “dispute” synonymously. Thus, the major difference is “alternative,” a key word that poses two important questions: To what is ADR an alternative, and what are the alternatives?
ADR refers to any means of settling disputes outside of the courtroom. Indeed, the high cost and delays of litigation have led to ADR’s popularity. ADR promotes three principal alternatives to litigation, all of them based on agreement making: negotiation, mediation, and arbitration.
Negotiation is the most common way to resolve disputes. A negotiation succeeds when an agreement is reached. When negotiation fails, the alternatives of mediation and arbitration are available, but mediation is simply an aid to negotiation. The parties must still reach an agreement for mediation to succeed. Arbitration is a true alternative to litigation, because the arbitrator makes a final decision instead of a judge. While arbitration can be imposed by law in emergencies, it usually results from a voluntary agreement between the parties to submit their differences to a third party.
There are no simple tricks to getting what we want from others through negotiation. The tough-as-nails approach sometimes works, but skillful persuasion is usually more productive. In his best-selling book How to Win Friends and Influence People, Dale Carnegie outlined three fundamental techniques that are useful in negotiation as well as in making friends:
Negotiation, however, involves more than merely one’s opponent. It is an interactive contest of communications that depends heavily on the way people react to each other. Particularly in complex negotiations, defining the issue or issues and assessing the relevant facts are two important first steps toward resolution.
While the voluntary techniques as well as litigation have a common goal—to resolve the dispute—they differ significantly in how they are invoked. Either side in a dispute can start a lawsuit without needing the opponent’s consent. While either side in a dispute can propose arbitration, it cannot be invoked unless both sides agree to do so. Although the same is true of mediation, proposing mediation is more difficult for parties who have reached an impasse because, by definition, an impasse usually reflects the declared position of both sides that they have made their final offer. These parties are more likely to consider mediation if proposed by a third party.
The challenges the disputants face in using the voluntary techniques also vary. In arbitration, the disputants’ challenge is to determine how best to persuade the arbitrator to decide in their favor. For negotiators, the challenge is to determine how best to induce an opponent to agree to give them what they want. They continue to have the same challenge in mediation, but they must now take the mediator’s presence into account in deciding on how best to get their opponents to agree to give them what they want. The mediator’s challenge is to get the parties to agree with each other.
These voluntary techniques can be used to resolve any and all disputes. The courts, on the other hand, can resolve only “rights” disputes. That is, disputes over alleged violations of rights and obligations under law or contract. They cannot entertain “interest” disputes, that is, disputes over claims that do not state what the lawyers call a cause of action. No court, for example, can tell a seller to take less, or a buyer to pay more. Nor can a court rule on the terms and provisions to be included in a new or renegotiated contract. Only the parties themselves can settle such disputes.
Interest disputes far outnumber rights disputes, and more lawsuits are settled through negotiation than decided by the courts. A lawyer retained by a claimant will almost always send a letter announcing her intention to sue but add that, to avoid the costs and delays of litigation, she would be willing to discuss a settlement. Of course, if a claimant cannot get the other side to sit down and talk, she may have no alternative but to sue. But efforts to negotiate a settlement are frequently undertaken at all stages of a lawsuit and sometimes even after a decision has been made.
The ability of the disputants to agree to use voluntary techniques is the only limit on their application in the resolution of conflicts. In their availability to resolve any and all disputes, the voluntary techniques, and negotiation in particular, can be viewed as the “do it together” techniques of conflict resolution.
The CPA Journal is broadly recognized as an outstanding, technical-refereed publication aimed at public practitioners, management, educators, and other accounting professionals. It is edited by CPAs for CPAs. Our goal is to provide CPAs and other accounting professionals with the information and news to enable them to be successful accountants, managers, and executives in today's practice environments.
Visit the new cpajournal.com.