There are three main ways to resolve disputes with your
technology suppliers. IT directors should be aware of the costs and
limitations of each approach
In an extract from the second edition of their book, Rachel Burnett
and Paul Klinger examine the three main options for settling
disputes over IT contracts.
Litigation
It may take several years for some cases to reach court, and during
the course of the litigation it is normal for the parties to try to
reach a settlement.
Most disputes where court proceedings are issued are settled by the
parties themselves without getting as far as an appearance in
court. However, immediate action at the outset can expedite
matters. Summary judgment - a procedure where there is no real
defence to a claim - can be an effective and relatively inexpensive
way of achieving a quick result.
Under English law, the losing party is often obliged to pay the
legal costs of the winner as well as its own. This can act as an
incentive towards settlement. Legal costs can sometimes exceed the
damages being claimed.
Arbitration
The Arbitration Act 1996 gives the parties much autonomy in
conducting arbitration and allows the arbitrator significant
powers.
The parties involved in the dispute choose a neutral person or
group of people to resolve the dispute by a binding and enforceable
decision or award. If they do not agree a procedure for
arbitration, the rules will be taken from those set out in the
Arbitration Act.
The choice of arbitrator enables the parties to select a neutral
adjudicator acceptable to both sides who has expert knowledge of
the area in dispute. The arbitrator is required by law to act
fairly and impartially.
Supporters of arbitration claim it is more flexible, quicker and
cheaper than litigation, but this is by no means automatically the
case. It may be more expensive and slower and with no effective
right of appeal.
It used to be the case that an arbitrator who was suitably
qualified and experienced in understanding the nature of computing
disputes would be preferable to a judge. However, judges are now
better educated about IT.
Mediation
Through alternative dispute resolution, a framework is created for
the parties themselves to negotiate a solution which they both find
mutually satisfactory, normally with the assistance of a neutral
third party mediator, sometimes also with experts. The process is
relatively informal, cheap, flexible and voluntary. In addition it
can be stopped at any time.
The third-party's role is based on consent, and the process stays
under the control of the parties. The costs are usually divided
between the parties. It is important that senior management is
involved.
The neutral mediator has no authority to make any decisions for the
disputing parties, but will have training in ways to help them
resolve their dispute by negotiated agreement without adjudication.
Unlike an arbitrator or judge, the mediator may participate in
developing proposals and making suggestions for settlement.
The mediator will meet the two parties separately and perhaps
redefine the main issues in the conflict, drawing out the strengths
and weaknesses of each issue. In this way, each of the parties can
explore different possibilities of compromise.
Order the book online (ISBN 0406908095) from:
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