Effective Methods of Settling Commercial Disputes

The assignment discusses various methods of settling commercial disputes, including arbitration, mediation, and negotiation. It highlights the importance of using these methods instead of litigation to resolve conflicts quickly and cost-effectively. The case study of Mr. Wilson's dispute resolution is presented as an example of how a trade union can use the Trade Union and Labour Relations (Consolidation) Act 1992 to protect its members' interests. The assignment also assesses the similarities and differences between these methods, with arbitration being identified as a more effective approach due to its formal process and guarantee of a final solution.

MANAGING RESOURCES IN BUSINESS
CONTEXT

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
Critically evaluating different alternatives to the civil court actions for resolving the civil
court disputes..........................................................................................................................1
CONCLUSION................................................................................................................................4
REFERENCES................................................................................................................................5

INTRODUCTION
Different types of conflicts arise between the individuals while working within the
organization (Allison, 2013). It is due to the presence of given aspect, is a need of managing
human resources arises in front of the manager. In this context, the study will showcase the
merits and demerits of different alternatives to the civil court action to the businesses which can
be used by them in order to resolve conflicts of the firm in an effectual manner. Furthermore,
with an aim to depict the effectiveness of the different alternatives varied examples will also be
drawn.
Critically evaluating different alternatives to the civil court actions for resolving the civil court
disputes
As Kelly, Hammer and Hendy (2014) have said that relying on court for resolving the
conflicts or disputes which arises within firm is not an effective method. These authors have also
said that the long procedure of court heighten the degree of conflicts between the parties rather
than resolving it. In addition to this, time is another most important factor which depicts the
ineffectiveness of litigation when it comes to resolving commercial disputes. In this context, it
has seen that each firm require that its disputes with other party must be resolved within a very
short period of time (Menkel-Meadow, 2015). This is because; if this does not happen then in the
given circumstance the smooth working of the firm will be impacted in a negative way. Due to
this, the sales and profitability condition of the firm will also be impacted. In addition to this, the
brand image of the company will also be hampered if commercial disputes will be taken in court
for resolution. Thus, different alternatives to civil court actions are far better than that of court.
However, the detailed explanation about the different means is depicted in below.
Arbitration
Arbitration is a situation where third party will be appointed to resolve the conflicts
between parties. The person will be appointed by both the parties who have some conflict and is
known as arbitrator (Arbitration, 2016). Arbitration is a formal process as compared to
mediation. Arbitrator will make the final decision after hearing both parties’ viewpoints and
parties are bound by the decision of the arbitrator. Thus, arbitrator will be treated as a private
judge for both the parties. Procedure of arbitration is administered by appointing arbitrator and it
is subjected to the contractual and regulatory norms. In accordance with the provisions of
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English law, arbitration can be in written or in the oral manner. However, in verbal agreements,
there will be implied applicability of norms of Arbitration Act.
One of the most significant benefits can be gained by the parties by using the arbitration
as the process for resolving commercial conflict will be no loss to firm's reputation. This is
because; by using the given proceedings the issue can be hidden by the corporation from media.
In addition to this, saving of time and money is another most important benefit which can be
gained by the firm if given process is used for resolving the conflicts. In this context, it has been
seen that an individual has to spend lots of money if cases will be confronted in front of
litigation. However, it has been evaluated that for the parties it becomes very difficult to overturn
the decision which is being taken by the arbitrator. Thus, here parties have to accept the decision
whether they like it or not (Pruitt, 2013).
The same thing is also being seen in the case of West Tankers Inc v Allianz Spa. In this
case, West tanker is claiming insurance from the company due to the collision of vessel.
However, insurance company has denied for the claim as being put up by the West tanker. As a
result of it, both parties have taken the decision to confront the given case in front of arbitrator.
But, the insurer has brought the given case in front of Italian court also. Here, both the parties are
using both method of resolving their disputes. However, the decision of arbitrator has come first
and here it has declared that West tanker will not be held responsible for the collision. This is the
negative declaration and can be enforced under section 66 of Arbitration act. Thus, if any
contradictory decision will be occurred in the Italian court law then it will not be considered as
applicable. Thus, both parties are obliged to follow the decision of arbitrator.
Mediation
Mediation is the type of voluntary process in which a mediator who is impartial to both
the parties will be appointed with an aim to resolve the conflict which occurs between the
parties. Here, mediator does not enforce its decision upon the parties but it facilitates the
negotiation between the parties. The process starts with the description wherein mediator
describes all the procedures and ground rules related with the case. Here, mediator adhere the
problems of both parties in front of their respective attorney (Zhang and et.al., 2012). The
advantage of mediation is that it tries to create or develop the win-win situation for both the
parties. In addition to this, mediation is quite flexible in comparison to the litigation. However, it
has been critically evaluated that the mediation does not possess any formal discovery procedure.
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Due to this, in some cases issues will be result as unsettled. The given thing is also being seen in
the case of Leicester Circuits Limited -v- Coates Brothers PLC. In the given case, Coates has
pulled out of mediation two days beforehand after making decision to mediate. This is because,
parties have argued that mediation often result into unsettlement of disputes. Thus, at last in the
given case the decision is taken by the court of law. Furthermore, the mediation also lacks
constitutional and procedural protection.
Negotiation
It is being regarded as one of the most basic mean of setting the commercial disputes
which is being occurred between the parties. In addition to this, the given type of method is also
being practised by many firms or individuals in order to resolve their issues. In negotiation,
parties have the authority that whether they want to negotiate on issue on their own way or they
can have the chance to appoint the appropriate attorney for the same in an effective way. In
addition to this, the given method of setting the dispute can be used at any phase of conflict.
Getting the quicker result and saving the time of party are being regarded as two most essential
advantage of the given method of resolving the disputes. However, sometime it has seen that the
use of negotiation by the parties makes the bad situation more worst (Johnston, 2013). As a result
of it the issue which occur between the parties will remain unsettled. The negotiation has proved
effective in the case of Wilson v United Kingdom [2002] ECHR 552. In the given case, Mr
Wilson is discriminated by its employer. Here, Mr. Wilson is getting fewer wages in comparison
to the workers who have signed the individual contract of the firm. Thus, Mr Wilson has
confronted the case in front of the trade union and thereby it got positive result. Here, union has
used the given act (Trade Union and Labour Relations (Consolidation) Act 1992) in order to give
protection to Mr Wilson.
Besides this, there are some similarities and differences being assessed between all the
given methods of settling the commercial disputes. The major similarities which exist between
all the given methods are that they all possess a very less formalized process. In addition to this,
by using the given method cost effective advantage can also be gained by the firm in an effectual
manner. Getting the quick solution to the dispute is another similarity which exists between all
the given methods.
However, instead of presence of given similarities there are some differences which is
being found out between the given methods (Burger, 2014). Here, one of the most significant
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differences which exist between arbitration and mediation process is associated with the
decision. In the case of arbitration, arbitrator makes the decision which needs to be followed by
both members of parties. However, in the case of mediation both parties take the decision. The
arbitrator which is appointed by the parties must be lawyer. But, such types of situations are not
seen in the case of negotiator (Chen, Wang and Huang, 2014). This is because; here negotiator
can be both lawyer and the individual who do not have any legal background.
CONCLUSION
It can be stated that all the given methods of setting the commercial disputes are better
and effective than litigation. This is because; it helps parties to resolve their conflict in a faster
way. However, among the given method arbitration is more effective approach. This is because;
it possesses very formal process of resolving the conflicts between the parties. Furthermore, here
parties have the guarantee that their issue must be ended with an effective solution. Overall, it
can be said that with the help of these given methods employees of the firm can be managed in
an effectual way.
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REFERENCES
Books, journal and online
Allison, J., 2013. Research Guide-ADR Research: Arbitration, Mediation, Negotiation, and
More. Harvard Law School.
Arbitration. 2016. [Online]. Available through: <http://www.hg.org/arbitration-definition.html>.
[Accessed on 4th January 2015].
Burger, W.E., 2014. Using arbitration to achieve justice. ADR, Arbitration, and Mediation,
pp.352.
Chen, L., Wang, W. and Huang, B., 2014. A negotiation methodology for multidisciplinary
collaborative product design. Advanced Engineering Informatics. 28(4). pp.469-478.
Johnston, B.M., 2013. Dispute Resolution In The Northwest. Pepperdine Law Review. 14(4).
pp.8.
Menkel-Meadow, C., 2015. Mediation, arbitration, and alternative dispute resolution
(ADR). International Encyclopedia of the Social and Behavioral Sciences, Elsevier Ltd.
Pruitt, D.G., 2013. Negotiation behavior. Academic Press.
Zhang, C. and et.al., 2012. A negotiation-based multi-objective, multi-party decision-making
model for inter-basin water transfer scheme optimization. Water resources management.
26(14). pp.4029-4038.
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