August 8, 2012
Procurement Perspectives | Stephen Bauld
Procurement and the mediation process
The construction industry and public owners need to resolve issues related to projects on a regular basis. Mediation and conciliation are two closely related dispute resolution techniques that have come to the fore through the growing interest in alternative methods of dispute resolution.
They differ from arbitration and other methods of adjudication in many critical respects. Mediation and conciliations are intended to assist the parties to the dispute to reach a solution to their dispute that is satisfactory to themselves. It has a voluntary (consensual) character.
In contrast, arbitration and other methods of adjudication involve the imposition of a solution by a third party decision maker. For this reason, mediation and conciliation tend to be more time consuming then adjudication. However, on the positive side, it is argued that people are more willing to live up to the spirit as well as the letter of a mediated resolution, than they are to an adjudicated one. Mediation may also minimize the possibility that the unsuccessful party will choose to leave the organization, rather than live with the decision that is imposed upon it.
Mediation and conciliation need not reduce the authority and duties of a leader merely to the role of a broker, who does no more then bring parties together. Leaders are expected to play an active role in the process of dispute resolution within an organization, by smoothing the way to a settlement. A key question, however, is how active that role should be. Mediation has been defined as:
“The process by which the participants, together with the assistance of a neutral person or persons, systematically isolate dispute issues in order to develop options, consider alternatives, and reach a consensual settlement that will accommodate their needs”.
Conciliation is similar in nature, but involves a process in which the third party plays a more active role in seeking to shape the final terms of the outcome. Mediators seek to create an environment in which:
— Trust can develop between the parties;
— Issues are identified and resolved, so they can be managed and resolved by the parties themselves;
— Positions can be subjected to reality testing;
— Disputes over issues can be separated from disputes between the parties themselves; and
— While divergence of interest between the parties may be recognized, each comes to understanding that they share a mutual interest in problem solving.
Since the role of a mediator is primarily one of a facilitation, in principle, a mediator needs to know little of the (legal or other technical) right or wrong concerning a dispute, nor is it necessary to have any particular knowledge of the range of options that are open to the parties, provided the mediator has sufficient people management skills to assist the parties in dealing with their dispute. In contrast, conciliators will normally be expected to possess sufficient subject matter expertise to allow them to evaluate and advise on proposals, and to put forward possible middle ground solutions of their own.
They often work actively in investigating and establishing the facts of the dispute and in making proposals for its settlement. A further distinction between mediation and conciliation is that mediation is generally seen as a non-adversarial process, whereas conciliation can operate just as effectively in an adversarial climate.
Mediation is quite possibility the most under-utilized method of resolving commercial disputes in Canada. It has often proven very helpful in bringing about an early resolution to disputes, that otherwise might form the basis for very lengthy (and expensive) litigation. While it is possible that those disputes would have settled in any event, whether or not mediation was used, the preparation for the mediation process and reality testing no doubt allowed each party to assess better the strengths and weaknesses of its case.
Stephen Bauld, Canada's leading expert on government procurement, is a member of the Daily Commercial News editorial advisory board. He can be reached at email@example.com
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