English for Global Business
Unit 08 Follow-up Phase
After studying this lesson, you will be able to :
•
understand the
definition of Claim;
• identify
Management of Claims and Disputes;
Objectives
At the Follow-up Phase
, claims by trading
partners involved may occur and the dispute
settlement procedure between the contracting
parties will be determined.
International businesses face regular
potential conflicts
between other businesses, customers, suppliers and
trading partners.
Many can be dealt with quickly and effectively through
negotiation, yet some disputes that remain unresolved may
affect the profitability and productivity of a business.
Alternative dispute resolution
, for example, is the
practice
of
settling
such
disputes
without
using
conventional legal modalities (e.g. the court proceedings).
Claims between Businesses
There are claims or disputes over terms of trade with suppliers,
predatory pricing, misuse of market positioning, misleading or
deceptive conduct, and can involve suppliers, operators in both
his/her own country or other nations around the world and
competitors.
Sales contracts
can suffer from breaches in
performance
and
disputes
are
commonly
focused on price, delivery of goods, quality and
customer service standards.
Claims
regarding the Trade Practices cases involve
areas such as price fixing, price discrimination,
restraint
of
trade(including
certain
types
of
exclusive dealings), abuse of market power(i.e.
called Market Claim), misleading/deceptive conduct
and unconscionable conduct (i.e. referring to
International Claim).
The methods used to resolve disputes include the litigation
and alternative dispute resolution (ADR) processes such as
negotiation, mediation, conciliation and arbitration.
Management of Claims and Disputes
The Methods used to resolve disputes
PARTIES SEEK TO RESOLVE DISPUTE
Litigation (traditional route)
Adversarial - binding decision of
third party
Procedure – governed by rules Consider positions rather than
interests in public domain
ADR (alternative)
Consensual Control
Continued business relations Confidentiality
(i) Negotiation
In negotiation, both parties attempt to reach an agreement or
settlement of disputes through give and take in an informal discussion.
No third party is involved in the negotiation.
Management of Claims and Disputes
(ii) Mediation
Mediation is a dynamic, structured, interactive process where a neutral third party assists disputing parties in resolving conflict through the use of specialized communication and negotiation techniques. All participants in mediation are encouraged to actively participate in the process.
Mediation is a “party-centered” process in that it is focused primarily upon the needs, rights, and interests of the parties.
The mediator uses a wide variety of techniques to guide the process in a constructive direction and to help the parties find their optimal solution.
In mediation, a neutral 3rd party assists the negotiations but does not render
a binding decision.
A disinterested third party acts as a go-between to help resolve disputes among parties themselves.
Management of Claims and Disputes
(iii) Conciliation
Conciliation is an alternative dispute resolution (ADR) process whereby the parties to a dispute use a conciliator, who meets with the parties both separately and together in an attempt to resolve their differences. They do this by lowering tensions, improving communications,
interpreting issue, encouraging parties to explore potential solutions and assisting parties in finding a mutually acceptable outcome.
Conciliation differs from mediation in that in conciliation, often the parties are in need of restoring or repairing a relationship, either personal or business.
Management of Claims and Disputes
(iv) Arbitration
In some countries, arbitration is a process provided by an act of law, adopted by parties through mutual agreement stipulating that they will submit any dispute that may arise between them to the impartial judgement of some third party of their choice and that the award by this impartial person will be final and binding.
Management of Claims and Disputes
(v) Litigation
In litigation, an accusing party (the plaintiff) files a lawsuit against an accused party (the defendant) with a judicial court of a country.
The court system renders a judgment or a decision based on relevant law and the facts.
Litigation is the most expensive and time-consuming method of dispute settlement.
In many cases, it take several years to get a court date.
Parties must do their best to resolve disputes through means other than litigation not only to save time and money, but also to avoid bad publicity.
Management of Claims and Disputes
Management of Claims and Disputes
Arbitration vs. Litigation
Public/private Arbitration Litigation
Type of Proceeding Private-between the two parties Public – in a courtroom
Type of Proceeding Civil - private Civil and criminal
Evidence allowed Limited evidentiary process Rules of evidence allowed
How arbitrator/judge
selected Parties select arbitrator Court appoints judge –parties have limited input
Formality Informal Formal
Appeal available Usually binding; no appeal possible Appeal possible
Use of attorneys At the discretion of parties; limited Extensive use of attorneys.
Waiting time for the
case to be heard As soon as arbitrator selected; short Must wait for the case to be scheduled; long
