|DISPUTE RESOLUTION PROTOCOL
Corporate Policy Statement
An initiative of The Canadian Foundation for Dispute
Resolution is to encourage corporations and law firms across Canada to sign its Dispute
Resolution Protocol which commits signatories to willingly consider and suggest
alternative dispute resolution processes in appropriate situations prior to turning to the
The protocol is similar in concept to a Corporate Policy
Statement on Alternatives to Litigation developed by the CPR Institute for Dispute
Resolution in New York several years ago. The corporate policy statement - otherwise known
as the "pledge" - has been signed by over 850 corporations and 2,800 corporate
subsidiaries. A corresponding law firm policy statement has been signed by over 1,500 law
The purpose of the dispute resolution protocol is to
encourage early resolution of business disputes through negotiation or alternative dispute
James F. Henry, president of the CPR Institute for Dispute
Resolution points out that "emotions may run at a high pitch at the beginning of a
business dispute and parties quickly assume an adversary stance".
"A primary value for a corporation to sign the dispute
resolution protocol," says Bill Hartnett, president of The Canadian Foundation for
Dispute Resolution, "is that it enables it to suggest alternatives to litigation in a
particular dispute while minimizing the likelihood of the other party believing that the
suggestion arose because of a perception of weakness in its case." And, says
Hartnett, "thats because the signature of the companys chief executive
officer and general counsel - if the company has one - shows that the commitment is
company policy and that suggestions to consider alternative dispute resolution will be
made in all appropriate situations. And the fact that the protocol has the force of a
corporate policy statement also encourages greater acceptance of alternative dispute
resolution within the corporation itself."
And the CPR Institutes James F. Henry re-emphasizes
the essence of such a policy statement or protocol when he says that "it helps you
get over the most important strategic hurdle to quick settlement - it lets you make the
first move - so that negotiations can begin early and before litigation takes on a life of
The dispute resolution protocol is not a binding commitment
to use alternative dispute resolution in every case. It is an expression of corporate
policy where signatories undertake to act in good faith and to consider ADR in appropriate
situations; it is not intended to create legally-enforceable rights. It also does not
preclude a signatory from taking any actions advisable to protect its access to the
courts. And if either party concludes that ADR is inappropriate for a particular case then
they are not bound to explore using ADR; for example, if a judicial determination of a
critical legal issue is essential.
Law Firm Policy Statement
A corresponding protocol for law firms involves making a
commitment to promote awareness and skills development in alternative dispute resolution
and acknowledging that they have an important role to play in effectively resolving
business disputes at potentially lower costs to their clients.
The corporate dispute resolution protocol sets forth the
ever-increasing expectations of corporate clients that they consider expertise in dispute
resolution - including alternative dispute resolution - as a factor in their selection of
lawyers to handle their business disputes.
A CPR Institute for Dispute Resolution survey of 124 law
firms in 1995 shows that 37% of those firms that had formally organized their ADR activity
gained new clients or new business from existing clients as a result of their ADR
expertise. Only 2% of those firms who did not report formal organization of ADR efforts
reported appreciable gains in new business.
Another potential benefit to signatories of the dispute
resolution protocol is that corporations will gain more ADR expertise and experience - and
they will become more comfortable with it.
Today, more than 95% of the court's disputes are resolved
without a trial. And frequently, cases are settled only as the trial date approaches and
after most of the costs have been spent.
The traditional litigation process is generally an
expensive one and it may not be necessary or appropriate for every dispute. Alternative
processes - such as ADR - can get parties to a decision point much more quickly than with
litigation and at much less cost and with much less disruption to a corporations
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