In New Zealand today, disputes are resolved only after thorough investigation and careful weighing of submissions and evidence. While straightforward, informal procedures may have dominated dispute resolution historically. However, in this day and age, and in the increasingly complex society we live in, these processes are being replaced by a growing number of specialist courts, tribunals, and other legal bodies that manage a great variety of disputes.
If you require management consulting advice or forensic services to help you settle a business dispute, BDO can help you. Our team at accountants in Whangarei offer guidance below explaining litigation and the three basic types of alternative dispute resolution procedures that disputing parties have available to them.
What options do i have for dispute resolution?
For those who need to settle a dispute before a judge, the Court system offers a formal government setting for them to come to a resolution.
Litigation
Litigation is the process of bringing a dispute before a court or tribunal to be formally resolved. Types of disputes that require government help to settle include disputes over business contracts or debts, including insolvency. If disputing parties take legal action by bringing their dispute before a judge or other decision-maker, the case will most likely be presented at the District Court or the High Court.
In New Zealand, the two main courts are the District Court, which manages disputes dealing with $200,000 or less, and the High Court, which manages disputes dealing with sums larger than $200,000.
While these are the main locations for legal proceedings to take place, other specialist courts and tribunals exist, including the Employment Court, the Environment Court, and the Family Court.
Main Three Alternative Dispute Resolutions
While litigation through the Courts is one of the most common roads taken to resolving disputes, various alternative routes can be taken. Below is an overview of the most common types of business dispute resolution.
1. Negotiation
The least formal alternative method of dispute resolution is negotiation. Unlike other alternative dispute resolution procedures, negotiation takes place without the presence of a third party. This means that while each party involved may choose to be represented by a lawyer who helps them present their argument, the disputing parties will attempt to resolve issues and come to an acceptable solution on their own.
The only exception to these negotiation procedures is when the parties choose to use an assisted negotiation layout. While assisted negotiation is still very informal, a third party is used and relied upon to assist the disputing parties in reaching a solution.
2. Mediation
Mediation is a process that involves third party assistance to create a safe environment where disputing parties can address their issues and resolve them if they wish.
While this is similar to other processes like assisted negotiation, it is set in a more structured and formal approach. To come to a resolution that is accepted by both parties, the mediator will proactively assist the parties in identifying the issues concerned and then help them come to a solution that they both find acceptable.
It’s important to note that while the mediator is there to help them arrive at a solution and may offer suggestions, they cannot impose any resolutions. The solution should be decided and reached by the parties themselves.
3. Arbitration
The most formal alternative method of settling disputes is arbitration. This procedure resembles a court hearing, with the role of the judge being assumed by the arbitrator. While this method resembles litigation proceedings, one of the differences between litigation and arbitration is that parties to an arbitration appoint their own arbitrator (or arbitrators).
In contrast to other alternative dispute resolution roles, such as a mediator who does not impose resolutions upon the disputing parties, an arbitrator does have the power to impose decisions.
While arbitration is often as expensive as litigation, if not more so, most other alternative dispute resolution types are cheaper and less costly on time costly as well.
Get in touch with the team at BDO today for expertise in dispute resolution
When involved in a dispute, it is important to determine which type of dispute resolution offers the most appropriate solution for your business needs. If you require corporate governance or a business adviser to help you manage a dispute, the BDO Forensic Services team offers specialist services and advice to assist with any issues arising from the dispute or litigation process.
Should you require any assistance, the team at BDO is here to help you make informed decisions at critical times. Contact us today to access BDO’s wealth of experience and expertise in dispute resolution.