chapter 4 notes.docx - Legal Disputes Businesses should aim...

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Legal Disputes Businesses should aim to manage disputes with express goals of - Avoiding time-consuming and expensive litigations o Sometimes, may be cheaper to simply write off amount or try to reach compromise with other party o May also want to consider the costs faced by the business, and potential publicity concerns from sueing (ex. an environmental activist) - Preserving desirable long-term commercial relationships o This may not be always possible and may result in litigation, especially if cost is Although many situation don’t require a lawyer, you may still want to consult a lawyer for legal advice regarding your legal rights , and based on that, decide upon your resolution technique With disputes, businesses may need to revise their risk management plan to ensure further preventive (ex. further precautions) or reactive (ex. revising insurance coverage) measures - Ex. if insurance company unwilling to pay, they may want to take procedures with checking credit history of insurance company, especially if large claim Alternative Dispute Resolution (ADR) Alternative Dispute Resolution – range of options for resolving disputes as an alternative to litigation o Any settlement agreement must be put into writing - ADR practitioners (ex. mediators, arbitrators) do not have to be certified Negotiation Negotiation – process of deliberation and discussion intended to reach mutually acceptable resolution to dispute - Is much more cost effective and usually quick, allowing parties to craft appropriate solution instead of having third party (ex. judge) impose a resolution - Also tends to preserve relationship between parties When to negotiate – can be used for virtually any dispute, provided they are willing to negotiate - Becoming increasingly common for parties to include in contract a clause agreeing for negotiation o Negotiation can be employed at any stage of dispute, even midway through a trial - There are some situations where negotiation is not proper way to proceed, such as if insurance covers risk that is subject of dispute o In this case, business required to allow insurer to conduct settlement negotiations o Any attempt by business to negotiate privately may jeopardize coverage How to negotiate – negotiations often carried out by actual parties to dispute, but may sometimes be done by lawyer, advocate, or counselor who has expertise - For negotiations, you want to send right person (ex. for a farmer, someone from manufacturing department) and not the CEO (who farmer might think has a lot of money) o This right person must know limits of negotiation though (must give instructions with clear guidelines), should also know his legal rights - Steps include investigate situation to determine nature and extent ot dispute by contacting individuals involved in own organization and appropriate people on other side of dispute to clarify situation a. Apology legislation - There is no technical rules in negotiations, but important to get off in right root (ex. show concern and apology to affected party)
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