Dispute Resolution Clauses In Commercial Contracts

I don’t mean to argue against the undeniable wisdom of inserting a dispute resolution clause in a commercial contract at the drafting stage.

What’s not to like… it makes absolute sense to agree a dispute resolution framework before a dispute arises.

But there is a BUT.

Most clauses, and there are hundreds of versions, are drafted on the premise that the dispute should get to mediation sooner rather than later. Definitely before any arbitration/court proceedings are started.

Some are multi layered; 1) first negotiate, 2) move on to mediate, 3) then arbitrate or litigate as a last resort – often with a carve out for injunctive relief.

Many have strict time frames, often measured in days, so a party to a dispute can force the selection of a mediator and convene the mediation within a relatively short time of the dispute occurring.

Because of this, these types of clauses risk pushing parties through the doors of the mediation room too soon… before the dispute is mature, before the raw edges have been knocked off and certainly before the parties have adequate information about their own or the opposite party’s position and interests.

They come to the table without adequately defining to themselves, and each other, what the dispute is all about – upon what it is they can agree and disagree, without adequate document exchange and to be honest without adequately spending time wallowing in the conflict and all that it brings with it.

The realities of the dispute, some that only come with age – the stress, the cost, the creeping doubt – are missing.

Like a ripe cheese, these things take time.

Paris: The Capital of Negotiation?

Paris has recently had a reputation for confrontation. But a hundred years ago  the allied powers (principally France, the US and Britain led by Clemenceau, Woodrow Wilson and Lloyd George respectively) were in Paris negotiating the Treaty of Versailles. Clemenceau had just survived an assassination attempt. He observed wryly that even after the greatest war […]

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Never Give Up: Persevering in Mediation

  “If you had not held us back that evening, the deal would not have been done.”  “Thank you and I wish you well.” In this post, I return to a familiar theme for mediators and for lawyers acting for clients in mediation: perseverance. The first of the two quotations above comes from a participant […]

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Representing Small Players in Multi Party Mediations

A good piece from Don Swanson, a lawyer out of Omaha, Nebraska, on representing bit players in large multi party mediations – we’ve all been there – other parties focused on the ‘big’ issues and it’s hard to get anyone, including the mediator, to focus on your supporting actor who has lower tier, but still crucial-to-them, […]

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New Appointment for John Sturrock

News from Scotland that our colleague John Sturrock QC has been appointed by the Scottish Government to conduct a review into allegations of bullying at NHS Highland. This short life inquiry will continue alongside his mediation work in London, Edinburgh, Belfast, Dublin and internationally. As well as his extensive commercial experience, John has worked at […]

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