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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 courts.

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 firms.

The purpose of the dispute resolution protocol is to encourage early resolution of business disputes through negotiation or alternative dispute resolution procedures.

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, "that’s because the signature of the company’s 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 Institute’s 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 its own."

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.

Promoting Awareness

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 corporation’s business.



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The Canadian Foundation for Dispute Resolution