Tag Archives: conflict resolution

HMG in the News (ST Forum 1 July 2014)

Linda wrote in to Straits Times forum to encourage more face to face dialogue with regards to controversial disagreements / conflicts in the public space.

"A dialogue may not necessarily lead to consensus. But even an emotive dialogue, if facilitated on neutral ground by a skilled moderator, can lead to greater empathy about the other party's wants, needs and desires. Parties can still agree to disagree, but they walk away with better understanding of how to engage constructively with minimal hostility."

- See more at: http://www.straitstimes.com/premium/forum-letters/story/disagree-over-something-lets-talk-20140701#sthash.46HuhZcI.dpuf image

The Price of Litigation: When Winning Comes at a Cost

$1.7 million. That is the staggering amount a Singapore-based couple spent on legal costs last year to decide where their divorce should be heard, as well as litigation costs associated with their two year-old son. The British judge presiding over their case called their case a "story of human tragedy", saying that the warring couple were committing “financial suicide” by not resolving their differences. “London High Court Justice James Holman said it was “tragic” that the couple had not concentrated on a ‘straightforward matter of how much to provide for the wife and son’. Instead, ‘so much firepower’ has been directed on the issue of where the divorce case should be heard.” The lawyer husband and anaesthetist wife could not compromise, and the judge noted that their “sustained forensic struggle throughout the hearing was painful to observe”. Described by the judge as “highly intelligent, very well-educated, energetic, successful and ambitious professional people”, the couple committed nearly one-quarter of their wealth to a “highly charged litigation and an atmosphere of intense emotion day after day in the courtroom”. Despite ruling in favour of the mother - which meant the divorce case would be heard in the English courts - this example just highlights how a win in court is rarely a 100% victory. Consider another example cited in a recent article on cost recovery in commercial disputes. Stamford Law Corporation’s Timothy Cooke explains how “a plaintiff successfully brought defamation claims in the Singapore High Court and was awarded S$210,000. It cost the plaintiff over S$1.1 million to prosecute the case at trial and on appeal. He was awarded S$250,000 in costs, leaving him over half a million dollars out of pocket.” Given how high legal costs can soar, sometimes to well over the claim amount, the winning party may still end up dipping into their own pockets to cover the cost of the litigation. Deputy Attorney General at the California Department of Justice Vincent DiCarlo sums it up perfectly when he describes litigation as a “bloodless war played by rules - expensive, exhausting, and generally out of control.  It should be avoided whenever possible.” He argues that a contractual alternate dispute resolution clause, carefully used in commercial contracts, can have a dramatic effect on how businesses resolve disputes with employees, customers, vendors and other stakeholders by discouraging claims from being brought, and limiting exposure to large damage awards. Mediation is one such alternative dispute resolution method. Choosing to mediate first when a dispute occurs has proven to make good business and financial sense, not least because it saves all parties time and money (offering a 60 to 75% settlement rate in the fraction of the time and money it takes to go to court), but also a rapid settlement (most clients settle within a full day of mediation or within 10 hours, not including the time taken to collect external data or for additional investigations). Dora Yip, HMG Research Associate

Why You Should Insist on a Mediation Clause in Contracts

When a dispute occurs, choosing to mediate as a first step makes good business and financial sense. Litigation and arbitration can be both expensive and time-consuming, not to mention stressful, what with the worry that comes with long, drawn-out court battles in the former and the finality and legally-binding nature of the latter. In what is a growing trend the world over, many organisations and individuals now insist on including a mediation clause in contracts, one that calls for mediation as the first step in settling disputes. Here are three reasons why:
  1. Most businesses and people want to resolve disputes as quickly and as cost-effectively as possible. It is in all parties’ interests to do so. Mediation has a remarkable track record - between a 60 to 75% settlement rate - especially when used at an appropriate juncture during the dispute.
  2. Mediation allows each party to tell their side of the story. In our experience, many disputes escalate because the different parties want their positions to be heard and validated. Mediation encourages empathy and understanding, something which more adversarial processes do not.
  3. A mediation clause pre-empts conflict and protects all parties from acting in the “heat of the moment”. If the contract does not have a mediation clause, it may be a challenge convincing the parties to use mediation when they are in a middle of a dispute. Think of the mediation clause as an active reminder to always pursue a peaceful resolution to conflict before embarking on a more adversarial approach.
An example of a mediation clause that can be inserted into a commercial contract is provided below: “If a dispute, controversy or claim arises out of or relates to this contract, or breach, termination or invalidity thereof, and if such dispute, controversy or claim cannot be settled and resolved through negotiation, the parties agree first to try in good faith to settle such dispute, controversy or claim through mediation, under the rules of [to insert rules governing mediation1]. The mediator shall be mutually agreed to by the parties, failing such agreement, the mediator shall be appointed by HMG.” While most practitioners agree that every lawyer-drafted contract should have some form of a dispute resolution clause, there is still a widespread variance as to the mode of dispute resolution to employ. Mediation is a sensible first-step, and we are likely to see the growing trend of its inclusion in contracts both locally and globally. Do contact us to find out more about how mediation can help you and your organisation minimise conflict. Dora Yip, HMG Research Associate 1. Refer to paragraph 3.6.7