Alternative Dispute Resolution (ADR) often provides greater flexibility, reduced costs and a more timely and amicable resolution to your problems. The many different forms of ADR can best utilised depending on your specific situation and the stage of your dispute. In our ADR series, we will look at how you can leverage the various ADR tools and techniques to obtain the best outcome for your situation.

In this first issue of our alternative dispute resolution series, we look at the role that informal without prejudice discussions can play in dispute resolution.

You, or your organisation, has recently become involved in a dispute with another party. It’s early days, but it looks like it has the potential to get nasty and court proceedings may eventuate.

You know that if this matter gets to court, it will likely cost you or your organisation a lot in terms of time and money and could impact on your relationship with the other party. A better solution may be to resolve the dispute without having to go to court.

What is the best way to do this?

There are many forms of alternative dispute resolution, but having an informal discussion with the other party can be a quick and inexpensive way to end a dispute before legal costs start to escalate and positions become entrenched. Lawyers can, but don’t have to, be involved. Depending on the parties involved and the nature of the dispute, this method of dispute resolution can be very effective, particularly where it is important to try to maintain an ongoing relationship with the other party.

Tips for running informal discussions successfully

  1. Make it clear to the other party that the discussions are occurring on a ‘without prejudice’ basis – that means, if the dispute hasn’t resolved at the end of the discussions, what you have said during the discussions can’t be used as evidence if Court proceedings are commenced (unless both parties agree);
  2. Ensure that people with the authority to bind the parties are involved in the discussions – this may include a director of your organisation, your general counsel (who has been delegated authority by your organisation to settle the dispute) or your lawyer; and
  3. If a settlement is reached, be sure that both parties are clear about what the terms of the settlement are. Having agreed to settle, you want to avoid future disagreements about the terms of the settlement. Documenting the settlement in writing contemporaneously is important to ensure the terms of the agreement are clear.
  4. Preparation is key. Ensure that you are well prepared for the discussions. What are your non-negotiables and what matters would you be prepared to compromise on in order to do the deal? What is important to the other party and how could you structure a deal that enables them to have a win or “save face”?

By keeping the above tips in mind, and being fully prepared for the discussions, disputes are often resolved in part or in whole.

Of course, informal discussions between the parties may not be appropriate for all disputes. In our next issue, we will look at the role formal written offers can play in dispute resolution.