Dispute resolution in business: Strategies for creating a conflict free workplace

NAMATIRAI RUZVIDZO

Mr. Moyo and Mr. Makova were once united by a shared passion for innovation and entrepreneurship.

Together, they co-founded Teneth Technical Services, a thriving tech firm based in Harare..

For years, their partnership flourished flourished- until success brought with it diverging  visions.

As the company expanded, differences between the two partners began to surface.

Mr. Moyo wanted to expand the business into new markets, while Mr. Makova preferred to focus on consolidating their existing customer base. The disagreements escalated and the once-friendly partners found themselves at odds.

One day, Mr. Moyo presented a proposal to the board of directors, outlining his vision for the company’s future.

Mr. Makova was furious, feeling that Mr. Moyo had gone behind his back to pitch the idea.

The tension between them became palpable and their relationship began to deteriorate rapidly. As the dispute intensified, the company’s performance began to suffer. Employees took sides, and the office environment became toxic.

Mr. Moyo and Mr. Makova stopped speaking to each other, communicating only through lawyers. The dispute eventually ended in court, with both parties seeking damages and control of the company.

The legal battle was brutal, with each side accusing the other of breach of contract, mismanagement and betrayal.

In the end, the court ruled in favor of Mr. Moyo, granting him control of the company.

Mr. Makova was devastated, feeling that he had been unfairly treated. The dispute had taken a toll on both men and their relationship was irreparably damaged.

The brutal business dispute had left scars, but it had also taught them a valuable lesson, that sometimes, it is better to prioritize relationships over profits.

Business disputes are an unfortunate reality in the world of commerce.

Whether it is a disagreement with a supplier, a contractual dispute with a partner or a conflict with an employee, disputes can arise at any time and can have significant consequences for a business. In this article, we will explore the various methods of business dispute resolution, their benefits, and how to choose the most effective approach for your business.

TYPES OF BUSINESS DISPUTES

Business disputes can take many forms, including contractual disputes which are disagreements over the terms or performance of a contract. There are also conflicts between business partners over management, finances, or direction. Sometimes disagreements between employers and employees over issues like wages, benefits, or working conditions also occur in the day to day running of organisations. Last but not lease there could be disagreements with suppliers or vendors over issues like delivery, quality, or payment.

IS IT POSSIBLE TO RESOLVE DISPUTES WITHOUT GOING TO COURT?

Yes, it can be done. A wide-variety of dispute resolution mechanisms that are short of, or alternative to, full-scale court processes have evolved to avoid the usual grief associated with litigation. Access to justice, therefore, goes beyond access to courts of law. There are a number of pathways to settle disputes without the scary formality, cost and complexity of litigation.

There exist a number of dispute resolution methods which some which are more effective than others depending on the circumstances. The various types of alternative dispute resolution mechanisms include negotiation, mediation, expert determination and arbitration. Alternative dispute resolution is flexible that it can be employed to resolve almost any kind of contention; including disputes that cannot ordinarily be resolved by the courts.

METHODS OF BUSINESS DISPUTE RESOLUTION

There are several methods of business dispute resolution, each with its own benefits and drawbacks. These include:

Negotiation

This is direct communication between parties to reach a mutually acceptable resolution. When a dispute arises, parties usually negotiate as a matter of course. A provision for negotiation may or may not be drafted into an agreement. Negotiation is, arguably, the cheapest alternative dispute resolution method and the most commercially viable solution. However, it requires the absolute co-operation of the parties and plenty of objectivity to avoid negative emotions and inflexible views. By its very nature, it should not be the sole dispute resolution method relied upon since it may not result in a settlement.

Mediation

This is where aneutral third-party facilitates a discussion between parties to help them reach a resolution. Mediation is a process where a neutral person called a “mediator” assists the parties to attempt to reach a mutually acceptable resolution of the dispute. The mediator’s role is not to decide the dispute but to assist the parties to communicate with a view to settling the dispute themselves. Control of the outcome is left to the parties. To work properly, mediation requires parties to be adequately prepared for and committed to the process. A skilled mediator will also guarantee success. With these conditions present, mediation can flourish as an effective tool for resolving disputes. The process focuses on the real interests of the parties, not their contractual or legal entitlements. Mediation is not a legally binding process. It is a voluntary process, and mediators do not have the power to impose a binding outcome on the parties. It should therefore be seen as supplementary to and not as a replacement to a binding process, such as arbitration.

Arbitration

This is whereby a neutral third-party makes a binding decision after hearing evidence from both parties. Arbitration is a dispute resolution system where parties agree to refer their dispute to an arbitrator or panel of arbitrators of their choice. The parties accept the tribunal’s decision as final and binding. It is suitable where parties want a final and definitive conclusion to their dispute. Further to standard arbitration, some arbitral institutions also offer expedited arbitration. Arbitration is the most widely accepted and used dispute resolution mechanism in commercial disputes. It is a legally binding process which allows parties plenty of flexibility to determine how they want to resolve their dispute. Arbitration has numerous advantages which include, among others, allowing parties to choose their arbitrators, choosing the form and extent of their arbitral process, picking the venue and forum where the arbitration will take place. Further, arbitral awards are also recognizable and enforceable in foreign jurisdictions. Court judgments are not readily recognizable and enforceable abroad.

Litigation

This is a court-based process where a judge makes a binding decision. Litigation is the process of resolving disputes through the court system, where a judge makes a binding decision. It involves filing a lawsuit, exchanging information, and presenting evidence in court to achieve a resolution. Litigation can be an effective way to resolve disputes, but it can also be time-consuming, expensive, and unpredictable. Some benefits of litigation include a binding decision on the parties which can provide certainty and finality. Litigation is also effective in protecting individual rights and interests. However, litigation also has some drawbacks mainly the fact that it can be expensive, with costs including attorney fees, court costs, and expert witness fees. Litigation is also time consuming and can take months or even years to resolve. The outcome of litigation is never certain, and parties may be surprised by the court’s decision.

Benefits of effective dispute resolution

Effective dispute resolution can have numerous benefits for businesses, including cost savings. Resolving disputes quickly and efficiently can save businesses significant costs. Dispute resolution methods like mediation and arbitration can be faster than litigation therefore insuring time saving. Furthermore, methods like negotiation and mediation can help preserve business relationships and as well as reducing stress by for both employees and employers by resolving disputes quickly and efficiently

Choosing the right dispute resolution method

The choice of dispute resolution method depends on various factors the type and complexity of the dispute can influence the choice of method. The importance of preserving the business relationship can influence the choice of method. More often family members involved in business can opt for negotiation or mediation for the sake of future relations. The availability of time and resources can influence the choice of method.

Last but not least, the desired outcome of the dispute resolution process can influence the choice of method.

Best practices for business dispute resolution

To ensure effective dispute resolution, businesses should have clear contracts. Well-drafted contracts can help prevent disputes and provide a framework for resolution. Communication should be effective, open and respectful. This can help resolve disputes quickly and efficiently. Businesses should seek advice from lawyers or dispute resolution experts to ensure they are using the most effective method. Furthermore, businesses should be open to different dispute resolution methods and willing to compromise.

Recommendations

Businesses should develop a plan for resolving disputes, including procedures and protocols. It is better to anticipate what processes should be adopted before a dispute occurs rather than try and solve a dispute which has already occurred. Employees should also be trained on dispute resolution procedures and protocols. At all times businesses must be in a position to seek professional advice. The advise can be sought from lawyers or dispute resolution experts to ensure they are using the most effective method.

Conclusion

Business disputes are an inevitable part of commerce, but they do not have to be destructive nor do they have to affect business operations. By understanding the various methods of dispute resolution and choosing the most effective approach, businesses can resolve disputes quickly, efficiently, and cost-effectively. Whether through negotiation, mediation, arbitration, or litigation, effective dispute resolution can help businesses preserve relationships, reduce stress, and focus on what matters most, growing and succeeding.

Namatirai Ruzvidzo is a registered Legal Practitioner, Conveyancer and Notary Public with the law firm, Ruzvidzo Legal Counsel. She can be reached on +263 784 228 534 or email namaruzvidzo@gmail.com, copying hello@rlcounsel.co.zw