1 Conflict Management and Dispute Resolution .docx

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Conflict Management and Dispute Resolution
Elective Module 66061
MSc Management of Projects

Peter Fenn
MACE
Manchester
M13 9PL
Tel 01613064233
Email: [email protected]
mailto:[email protected]
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Conflict Management and Dispute Resolution

Table Of Contents And Workbook Outline
How To Use This Workbook
1. Introduction
2. Conflict Theory
3. Conflict Management and Dispute Avoidance
4. Bribery and Corruption
5. Negotiation
6. Mediation Principles
7. ADR Processes and Game Theory
8. Cooperation and collaboration
9. Dispute Avoidance
10. Comparison of Dispute Resolution
11. International Law and International Disputes
12. Conclusion

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How to Use this Workbook
This workbook has been specially designed and written for the
elective module in
Conflict Management and Dispute Resolution on the MSc in
Management of Projects.
It will help you to plan your study and to work systematically
through the course. You
should use this workbook as the basis of your studies. The
workbook is just part of the
material which is provided at the Blackboard Virtual Learning
Environment [VLE].
There are 5 main teaching documents:
1. This Workbook [ available at any time as an ebook and on
Blackboard]
2. The Learning Modules [available ONLY at Blackboard]

3. I give a synchronous lecture for each learning module and the
Lecture Slides
are available at any time on Blackboard
4. All the lectures are copied and are available as asynchronous
learning
5. As preparation for each topic I present a brief 10-15 minute
video detailing the
content of the coming weeks learning module and full lecture.
In addition I expect that you will do some reading. I try to
give more reading, web
material, videos etc in each week’s folder on Bb.
Content
The workbook is divided into sections that reflect the syllabus.
Each section begins with
an introduction, which briefly explains the topic to be studied
and may suggest areas to
be focused upon. This is followed by a list of objectives that
should be achieved after
studying the section.

The substantive part of the text must be read very carefully, and
you must ensure that
you understand the concepts before moving on to the next
section. It is important that
you are sure that you have achieved the objectives identified at
the beginning of the
section.
Questions
In this workbook there are boxed questions in the text; and
these are repeated in the
web based learning modules. These are designed to make you
stop and think about the
issues, and sometimes the rules of law, you are studying. You
should answer these
questions before proceeding. However, not every question will
have a clear answer.
This is the nature of the subject.
After the substantive part of each section, you will find some
short revision type
questions. These basic questions are a good way of checking the
extent of your

understanding of the main concepts. In spite of the fact that
they are basic, you are
strongly recommended to do these questions before moving on
to the next section. The
questions can be answered by reference to the text and some
self study. If you are unable
to answer the questions you should read the section again to
identify areas that were
unclear to you at the first reading.
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Following the revision questions, there will normally be an
essay-style question. This
is the type of question that you can expect as part of your
assessment. You should
attempt these questions to see if you can identify the issues
raised.
Writing an answer
It is important to understand how to write an answer to a
question. When answering an

essay style question, you should try to structure your answer:
start; middle and end is
always a good structure. Start your answer with a short
introductory paragraph
outlining your treatment of the topic; set the stage for the text
which follows. In the
middle deal with the substantive issues; what are they? At the
end make sure you have
answered the question; and reach conclusions based on your text
in the middle.
Questions have a command work e.g. discuss – this requires at
least two viewpoints or
opposing theories; make sure you deal with the command word..
Having determined the issues in a problem (and remember there
may be more than one
issue in a question) you may have to state the law that applies
to the particular issue. In
Mediation this is less likely than other areas e.g. arbitration
where a statute applies. If
the law is from a statute, you will need to state which Act and
which section applies.
So, for example, s 11 of the Unfair Contract Terms Act 1977. It
is not necessary to

memorise s 11, but you should be able to state the effect of the
section. Having done so
you must then show how it relates to the problem you are
dealing with and try to come
to a conclusion on that issue. Sometimes it will not be possible
to arrive at a firm
decision, normally because the question does not give you all
the facts. It is permissible
to say that a particular conclusion is more or less likely in the
circumstances. It is also
permissible to give one or two possibilities, but you must be
careful not to lose sight of
the rest of the question.
The relevant law may also be found in the decision of a case;
again less likely in
Mediation but needs to carefully monitored. You will need to
state the name of the case
and the principle it provides. When stating the name it is not
necessary to put down the
entire citation just the name of the case is sufficient: for
example, Donoghue v
Stevenson. Should you be unable to remember the entire case
name, simply 'the

Donoghue Case' will suffice. When you cannot remember either
part of the name, but
remember some salient facts, which will identify the case, you
may state those facts
very briefly. For example, in relation to the above, you may say,
'in the case of the snail
in the ginger beer bottle'. Do not panic if you do not remember
the case name, it is more
important to state the principle involved. Try to remember the
most important cases in
each topic, rather than all the case names in the list. Many of
the cases merely illustrate
a point, rather than create new law. These illustrative cases will
help you to understand
how the courts apply already established principles of law.
Having identified the issues and stated the law, you must apply
the law to the particular
set of facts that you have been given. This process must be
repeated for all the issues
the question raises before you can finally come to a conclusion.
Revision and assessment technique

The following are just a few suggestions on matters you might
like to have in mind
when revising for and writing the assessment.
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You should plan your revision in good time. Apportion enough
time to each topic that
you are studying. It is a good idea to test your self after revising
each topic. This should
include writing an assessment style answer to time, as explained
below.
You should be careful to note mark allocations on the questions.
It is pointless to spend
an excessive amount of time in producing a lengthy answer to
part of a question that
only merits a few marks, whilst giving a short answer to the part
meriting higher marks.
Deal with the command in a question and answer the question;
that is the question
posed, not the question you wish had been posed!

I hope that you will find this course stimulating and
challenging. It is hoped that when
you have completed the course you will have a sound
appreciation of the basic
principles of Conflict Management and Dispute Resolution
Good luck with your studies!
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Introduction
Chapter 1
Some issues
Why teach a course on conflict and disputes for project
managers? I am neither a
lawyer nor a project manager, but I have taught such courses to
Engineers and a
postgraduate course to Project Managers for more than 10 years.
The Engineers course

is at MEng level but might be described as an undergraduate
level course; the Project
Management course is post-graduate MSc. Both professionals
need to know about
conflict and dispute issues but the study of law is a peripheral
issue. I have been
involved in commercial disputes for longer, these nearly always
involve lawyers and
often Project Managers or Engineers. Recently the Project
Manager’s course has
become truly international in one year, 2018, more than 250
students from almost 30
countries took part. It was clear to me that Project Managers
[PMs from now] had to
understand some law. I wonder if somewhere else in one of the
10500 universes someone
else is writing a book called Project Management for lawyers
using similar logic.
I set a piece of coursework for many years. In my feedback.: “
Students reported time
spent by Project Manager in dealing with conflict and dispute
ranging between 10 and
70 to 80!% of their total time?” This is the danger or the
problem in this field its

dominated by anecdote and unsupported data. One academic
paper can be found with
a simple search.
MANAGERS SPEND 42% OF THEIR TIME ON REACHING
AGREEMENT WITH
OTHERS WHEN CONFLICT OCCURS. Conflict Resolution in
Project
Management
Amy Ohlendorf
https://www.umsl.edu/~sauterv/analysis/488_f01_papers/Ohlend
orf.htm
The citation to support this Ford J. Workplace conflict: facts
and figures.
URL:http://mediate.com/workplace/ford1.cfm returns
The Page cannot be found.
The page you are looking for might have been removed, had its
name changed, or is
temporarily unavailable. Also, please check for a typo in your
address. (error 404).
There are many reasons why I chose to teach a course for PMs ;
not least because there
are many books out there but few for PMs. So to further

confuse things I’ve called this
one conflict management and dispute resolution for PMs,
because strictly its not Law.
Like many things around legal issues this book will be plagued
by definitions. Is it:
Law; the law; or laws? These debates are great fun, but not for
us here. You will find
many things that are different in the study of legal issues. For
example Project
Management tends to be taught on the Instructivist approach
where an instructor
delivers the ‘right’ answer. While law [call it what you will]
adopts a Socratic style;
here scenarios are developed and the leader argues with a
position perhaps by
developing Reductio ad absurdum. There have been strong
pressures to purge courts
of Latin so that is the last bit in this book and you can look it
up, Socratic too.
What do the law and Project Management think of each other?
Perhaps you have a
view on the law. A recent case helps with what the law thinks
of Project Management
and leads to the some more introductory issue. In The Trustees

of Ampleforth Abbey
Trust v Turner & Townsend Project Management Limited 144
Con LR 115, [2012]
TCLR 8, [2012] EWHC 2137 (TCC) it was noted at para 76:
“it may be impossible in any event, to define with precision the
expression "project
manager"”
https://www.umsl.edu/~sauterv/analysis/488_f01_papers/Ohlend
orf.htm
http://mediate.com/workplace/ford1.cfm
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The first issue is Legal Citation and reporting, this is a
bewildering field. Many, many
cases weave their way through the court system; historically
only certain people were
allowed to report cases because this then formed the case law
system which is a feature
of the Common Law system in England and Wales (see later).
Information Technology
IT has changed everything and now the majesty of the case law
system is available with
the click of a mouse. Try and find the The Trustees of

Ampleforth Abbey Trust v
Turner & Townsend Project Management Limited case and read
the judgement, does
the judge say that Project Management is simply common
sense?
The second issue is that the Ampleforth Case might be seen as
the latest in a line of
cases dealing with the role of PMs, other relevant cases include:
Royal Brompton
Hospital NHS Trust v Hammond (No. 9) [2002] EWHC 2037
(TCC) and Pozzollanic
Lytag Ltd v Bryan Hobson Associates [1998] EWHC 285
(TCC), [2000] B.L.R. 233.
Do PMs need to know the cases? There are so many? I suggest
that PMs need to be
aware of what a line of cases means but of course they don’t
need to know the cases.
That’s what lawyers do and leads to the next point.
Your search for the Ampleforth case will undoubtedly have
thrown up many
commentaries on the case; free to access on the internet.
Written mostly by lawyers,
but some by specialist Project Managers with an interest in the
law; some by those

irritating swots who have the ability to be dual qualified. Why
write things and then
give the words away for free? Mine are collected together and
sold as a ridiculously
expensive book. The answer to my question raises so many
interesting issues and I do
not, for a moment, cast any doubt or aspersions on the people
who write things then
give them away for free. If you are interested do a google
search on Web2.0 and watch
hours of your life float away, gone for ever.
This book takes the model of the independent Project Manager
appointed, and paid for,
by the client. This is not the only model, if you are a project
manager within an
organisation; the issues raised translate to your model. Either
way stand back and
reflect; read the Ampleforth case and see the issues raised
there, translate them to your
particular model.
It is impossible to write a disputes unit without reference to
some law, both statute and
case law, but this is not a legal reference book. If you seek a

reference look elsewhere,
there are plenty.
Finally I hope I have answered my own question: Why write a
book about disputes and
project management? By posing more questions, just like
Socrates.
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Some issues of law
The United Kingdom of Great Britain and Northern Ireland
(UK) consists of four
countries: England, Wales, Scotland and Northern Ireland. Some
law applies
throughout the whole of the UK; some applies in only one, two
or three countries. This
book deals with law in England and Wales; remember things are
different elsewhere,
in Scotland and Northern Ireland. Whatever you do don’t say
British Law; particularly
to a Welshman or a Scot or Irishman.

Sources of Law
Where does law come from? A nice easy one; but of course like
everything else it gets
difficult, the two principal sources of English Law are
legislation and common law.
Two important additional sources of law are: European Union
law and the European
Convention on Human Rights. I first started thinking about and
writing this book before
‘Brexit’ and a major influence on the vote was that we, whoever
we are, should not be
bound by European courts. I am finishing writing the book as
exit looms, who knows
what will happen to our laws, whoever our refers to.
Legislation is by statute. Common
law (sometimes case law or precedent) is developed by judges
through decisions in
courts when individual cases are decided, as opposed to the
statutes made or adopted
through legislative process
There is no single series of documents that contains the whole
of the law of England
and Wales. This is often surprising to non lawyers and lawyers

from other jurisdictions
The legal Profession[s]
Historically the legal profession in England had two branches;
barristers and solicitors,
each with its own controlling body. The two branches did
different things, and most
notably barristers were the clients voice in higher court; they
alone had rights of
audience i.e. they could be heard. Those restrictions are mostly
gone and more players
have now been added to the mix: e.g. paralegals and legal
executives. The term lawyer
will be used from now, and lawyers will advise which specialist
to consult. In the same
way that you see a doctor who then refers you for specialist
advice to a specialist doctor;
you see a lawyer who then advises which specialist lawyer
might be consulted. That
specialist lawyer might be a paralegal; a legal executive; a non
lawyer; a solicitor; a
barrister or a specialist senior barrister who might be a Queens
Counsel. The first
lawyer you consult might be specialist; might be a paralegal; a
legal executive; a non

lawyer; a solicitor; a barrister or a specialist senior barrister
who might be a Queens
Counsel. You get the idea.
The legal system in England and Wales
The United Kingdom has three separate legal systems; one each
for England and Wales,
Scotland and Northern Ireland. This reflects its historical
origins and the fact that both
Scotland and Ireland, and later Northern Ireland, retained their
own legal systems and
traditions under Acts of Union 1707 and 1800. This section
deals with the judiciary of
England and Wales.
The justice system is one of the three branches of the state. The
other two branches are
the executive, or the government, and the legislature, which in
England and Wales is
the two Houses of Parliament. In other [mostly] democracies
these three branches of
the state are separate from each other by a principle known as
separation of powers.
Roles and functions are defined within written constitutions,
preventing the

concentration of power in any one branch and enabling each
branch to serve as a check
on the other two branches. The United Kingdom does not have
a constitution that is
contained in a written constitutional instrument; and
periodically attempts are made to
deal with this. These are fascinating points of Law and politics
but hardly the detail of
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a book on legal issues for PMs. If you want to read more, and
the structure of the court
system try The Courts and Tribunals Judiciary Website at
https://www.judiciary.gov.uk/.
Stratification
Justinian was a Roman emperor from 527 to 565, he was
famous for many things, his
role in formalizing or codifying the law of Rome came through
his legal writing. The
Institutes of Justinian was Justinian’s codification and is useful
here because it

demonstrates the law’s predilection for stratification.
Law is stratified or divided in many way. Substantive or
procedure. Criminal or civil.
Common law or statute. Public or Private. All attempts to
stratify are difficult at the
boundaries and the layers or divides often overlap.
Procedural law comprises the set of rules that govern the
proceedings of the tribunal
[court or arbitration]. The tribunal needs to conform to the
standards setup by
procedural law during the proceedings. These rules ensure fair
practice and consistency
in natural justice and rule of law in England or "due process" in
the USA.
Substantive law deals with the legal relationship between
people or the people and the
state. Therefore, substantive law defines the rights and duties of
the people. Procedural
law lays down the rules by which they are enforced. Of course
the differences between
the two need to be studied in greater detail if you are interested
for better understanding.
More than that will not be said here.

Criminal law seeks to punish the wrongdoer. Civil law seeks
the redress of wrongs
by compelling compensation or restitution: the wrongdoer is not
punished.
Private law applies to relationships between individuals in a
legal system. e.g. contracts
.
Public law applies to the relationship between an individual and
the government. e.g.
criminal law
Common Law or statute ? As English law first developed there
was little legislation
or statute. Judges made law by their decisions on cases, these
laws were followed or
bound the whole country by the system of precedent; the
common law of England
developed. As society developed and parliamentary democracy
was born law made by
the monarch was replaced by laws made by legislation of
parliament. The two co-exist
to produce the law of the land but a Common law system
became a way of describing
jurisdictions which followed the English system. As opposed to
a Common Law

system, Civil Law system is used to describe jurisdictions
which follow a Roman or
codified system [i.e. the law is written down].
This book is mostly about Private Law not Public , it is mostly
about Civil not Criminal
[though much of Health and Safety Law is Criminal law], it is
mostly about substantive
law not procedural law. Although some procedural law must be
considered [Arbitration
and Adjudication]. This book is mostly about the common law
not civil law but again
some Statute must be considered [again Arbitration and
Adjudication are examples.
So now its confusing: civil law as opposed to criminal law but
civil law can also mean
a non common or codified system, and back to Justinian. But
before that what are the
legal systems around the world? Again its simple but its not.
The systems are:
Common Law [e.g. England and Wales]
Civil Law [e.g. most but not all mainland Europe]
Bijuridical Law [e.g. South Africa]

Fidqh or Islamic Law [e.g. Saudi Arabia]
Fig x shows a world map of legal systems
https://www.judiciary.gov.uk/
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This work has been released into the public domain by its
author at the English
Wikipedia project. This applies worldwide. Source
http://upload.wikimedia.org/wikipedia/commons/2/21/LegalSyst
emsOfTheWorldMap
.png
Fig x A world map of legal systems
Red Common Law; blue Civil Law; brown Bijuridical Law;
yellow Fidqh or Islamic
Law
. Remember that by their very nature the explanations offered
here are simplistic you
need to read more than the material here. An example from

elsewhere: introductory
science explains atomic structure as a nucleus circled by
electrons; intermediary science
includes protons and neutrons; advanced science talks of many,
many sub atomic and
sub nuclear particles. An introduction to contract and tort
cannot go direct to the
advanced explanation.
PMs come from and work in many nations and it would be
impossible to consider all
the aspects of every project in each country. However many of
the issues facing the
parties to projects are generic; and by considering certain of
these issues in differing
countries you will be able to analyse the effect of risk and
contract conditions; no matter
what the project or the contract or how the risk is allocated.
Finally projects operate within legal frameworks and
jurisdictions; this book describes
the legal frameworks under generic headings and also provides
some analysis of the
jurisdiction in England and Wales. Many countries share
similarities with law of

England and Wales, but many do not. It may be that the country
in which you are
operating has a different legal system or that a particular area of
the law is different;
you should always consider the effect of jurisdiction.
Projects need not be bound by the law of the country in which
they are physically
situated or the law of the countries from which the parties are
drawn. Imagine the
common situation:
An infrastructure project in an African country:
• funded by the World Bank;
• designed by engineers from Scotland (United Kingdom);
• project management by an organisation from the USA;
• procurement arranged by quantity surveyors from Australia;
• construction management by an organisation from England;
• sub-contractors from Holland, Malaysia and the African
country;
• subject to the law of England;
emsOfTheWorldMap.png

emsOfTheWorldMap.png
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• disputes to be dealt with a variety of procedures culminating
in
International Arbitration in Switzerland.
It would be difficult, although perhaps not impossible, to
include in any book detail of
all these arrangements and all the jurisdictional issues; and it is
not attempted here.
International law
This is a confusing term and for our purposes we can assume
that there is no such thing.
Public International Law governs the relationship between
states and international
entities. PMs will seldom be involved in such matters. Private
international law, which
addresses the questions of (1) which jurisdiction may hear a
case, and (2) the law
concerning which jurisdiction applies to the issues in the case.
English Law and
lawyers term this conflict of laws. The conflict is which court
has jurisdiction? And

which law applies. Parties can choose the law and the
jurisdiction which applies to
their project, usually via their contract. The phrase:
The Agreement and these Conditions shall be governed by and
construed in
accordance with the law of England and Wales, the parties agree
to submit to
the exclusive jurisdiction of the Courts of England and Wales in
respect of any
dispute which arises out of or under this Agreement.
Is commonly seen in contracts. The parties actively seek
English Law and the English
Courts. Why parties would do that is a complex issue, and will
be returned to later [in
Chapter 11]. You might consider it: Why would the parties to
our imaginary project
seek English Law and English Courts?
Remember our infrastructure project in an African country:
• funded by the World Bank;
• designed by engineers from Scotland (United Kingdom);
• project management by an organisation from the USA;

• procurement arranged by quantity surveyors from Australia;
• construction management by an organisation from England;
• sub-contractors from Holland, Malaysia and the African
country;
Why would it be subject to the law of England; with any
disputes to be
dealt with a variety of procedures culminating in International
Arbitration in London? The law in England and Wales, the legal
system
in England and Wales and English [and Welsh] Lawyers is a
great
contributor to UK plc. In 2016 The Law Society said:
Net exports of legal services have also grown in value by an
average of 5.6 per
cent per annum over the last 10 years, to £3.6 billion in 2014.
The legal services
sector is a net exporter, helping to offset the UK's overall
balance of payments
deficit. English and Welsh law is the choice of law
internationally and England
and Wales is the jurisdiction of choice.
In some quarters there is a tendency to blame lawyers for lots of
things. A line from

William Shakespeare's Henry VI, Part 2, Act IV, Scene 2. Says
"The first thing we do,
let's kill all the lawyers”. I am not in that camp. Some lawyers
may read this book to
point out my, many, puerile errors. Go easy on me, I am your
fan.
12
Eats, shoots and leaves; can a word modify a sentence and what
is the cost of a
comma
There are many books which point to the havoc wreaked by poor
punctuation. Try the
sentence ending eats shoots and leaves as opposed to eats,
shoots and leaves. Google
it and see.
How about considering if a word can modify an entire sentence?
In Flores-Figueroa v.
United States. The U.S. Supreme Court decided that the word
“knowingly” modifies
not only the verb, but also the direct object following the verb.

Ultimately the poor use of syntax, grammar and or punctuation
might cost you dear. In
Canada a misplaced comma reportedly cost Rogers
Communication Inc $2.13M.
There is a point in this rant for attention to grammar and syntax.
PMs communicate via
the written word. The law and lawyers often have to decide a
meaning when the written
word is unclear. The written word is an important tool for PMs;
and writing is an under-
rated craft skill.
Read your work and read it again and read it again. Arbitrators
are advised to finish an
award 3 days (at least) before it is due and put it in a drawer for
a day before re-reading
one last time. Try it. Ask an independent third party to read
for sense. Even if they
know nothing about the subject matter they can advise if it
makes sense. The might be
anyone; might be a colleague: mum; dad; son; daughter; wife;
husband; boy friend or
girl friend. But think about the law or the contract. An
arbitrator can’t ask anyone, or

can they? If you want to see the debate about this you will have
to consult a specialist
text or a specialist lawyer. What about something you produce
for a client or at work,
can you show that to anyone? Look in your contract, see what
it says. You will have
to consult a specialist text or a specialist lawyer and this might
encompass Employment
about which this unit says nothing.
13
What is law
The law is bound up with many things: concepts of justice;
ethics; fairness and rules.
Common definitions include reference to rules. The system of
rules which a particular
country or community recognizes as regulating the actions of its
members and which it

may enforce by the imposition of penalties. The law might say
shooting some birds is
against the law and might impose a penalty of money or
imprisonment. Few laws say
You must shoot certain birds. This is often talked about in
terms of sins of omission
and sins of commission.
Great thinkers; philosophers; jurists and lawmakers have written
about these things.
Try Socrates, John Rawls, John Stuart Mill and Jeremy Bentham
on the laws of Athens,
Justice, Liberty and Utilitarianism. Try many, many others.
Try: law; the law or laws.
My example. Plato recorded the trial, condemnation and
execution of Socrates in a
series of dialogues, Socrates himself left no written work. In the
dialogue with Crito;
after Socrate’s trial a group of his friends, led by Crito, devised
a plan for Socrates to
escape, and avoid execution, but Socrates would not join in the
plan. He argued that:
life was only worth living and striving for if it was a good life.
A good life meant

obedience to the laws of Athens. Even if he had been wronged,
and he had; he could
not reply with a wrong. He had been condemned by due process
and he must remain
obedient to the laws.
Socrates dreamt of the laws of Athens addressing him and
concludes: the Laws are more
honourable than one's parents, for they too beget, educate, and
nurture their citizens.
He has no choice but to obey the law. You might think about
this when you think about
why people obey laws.
14
Chapter 2: Conflict Theory Management And Dispute
Resolution
Summary
There does exist a theory of conflict, proposed by Karl Marx

and developed by others.
There is considerable interest in conflict and disputes from a
psychological, through a
sociological to a commercial perspective. It used to be thought
that all conflict was a
bad thing Amongst the first to question this was Mary Parker
Follett who developed the
concepts of functional and dysfunctional conflict. The
generally accepted view now is
that conflict and dispute are different. The difference however
is less easily explained.
The widely held view is that conflict, which is all around in
western dialectic, may
develop into dispute [although some argue the complete
opposite that dispute is all
around and conflict is the stronger term].
This course and this chapter takes the view that conflict is
inevitable; and is an essential
part of dynamic capitalism. Dispute may flow from the
conflict. If you like conflict is
inevitable dispute is not. Dispute may emerge from conflict but
conflict does not emerge
from dispute. Some talk of functional conflict and

dysfunctional conflict or dispute.
Two things are required therefore: conflict management and
dispute resolution.
Conflict Management is considered in the next chapter. The
dispute resolution
techniques are considered individually in later chapters but here
the four major Dispute
Resolution techniques are stated as: Mediation; Arbitration;
Construction adjudication
and Litigation and are compared and contrasted under the
headings of : Formality;
Speed; Flexibility and Cost.
The cost of Commercial Conflict and Dispute is not easily
quantifiable but one thing is
clear whatever the cost is, it is something that should be
avoided
Those believing the argument that conflict is inevitable have to
consider the example
of the Dabbawallah of Mumbai; conflict is almost unheard of;
estimates are that less
than one in six million deliveries produce mistake. A case

study of the Dabbawallah is
made.
15
Introduction
Both the professions and academics are enormously interested
in commercial conflict
and disputes. The interest is mostly with the techniques used to
resolve disputes; there
is little by way of interest into conflict management or dispute
avoidance. This chapter
considers four areas:
• An introduction to conflict theory
• A discussion of the difference between conflict and dispute;
• An outline of the myriad of techniques used to resolve
disputes, in the UK this
reflects the government’s current approach and that of other
interests which seek
to make savings by optimising efficiency in dispute resolution;

• The lack of evidence that is apparent in any discussion of
commercial disputes.
The chapter discusses the absence of an empirical base to the
study of disputes.
The UK construction industry is given as an example. The lack
of an empirical
base means that there has been little consideration of the issues
of
understanding; explanation or prediction of commercial
disputes. A research
agenda is proposed where an aetiological approach to
commercial disputes is
employed; this, it is proposed, may help develop a mature and
sophisticated
research base, which may help industry performance.
A case study is made of the Dabbawallah of Mumbai where
99.99966% of the products
manufactured [services delivered in this case] are statistically
expected to be free of
defects. Or if you like one in six million deliveries produce
mistake.
Conflict Theory

A theory of conflict does exist; it was founded by Karl Marx1.
Marx expresses the
theory in terms of a class struggle; the struggle between classes.
Others. Notably Max
Weber took the theory forward . A glance at the conflict
literature shows there is a great
diversity of conflict knowledge; from the everyday knowledge
we all have to the
sophisticated theoretical writings of psychologists and
sociologists. The problem is
how to present this broad range of knowledge in an
understandable manner. One way
of dealing with this is to consider that the theories apply to
many different conflicts;
even that they apply to all conflicts. Sociological theories
apply to commercial conflict.
In addition the theories will be presented in a simple way. One
famous definition of
economics is that it is a study of the allocation of scarce
resources which have
alternative uses. Conflict theory might be expressed in a
similar way; conflict is
inevitable as organisations seek to redistribute scarce resources,
a classic Marxist view.

Conflict And Dispute: Is there a difference between conflict and
disputes?
Disputes are time consuming, expensive and unpleasant. They
can destroy
client/supplier relationships which have been painstakingly
built up over long periods
of time. Disputes can add substantially to the cost of a project
even making a project
unsuccessful, unfeasible or negating any benefits. Disputes
need to be avoided; if they
cannot be avoided then they should be resolved as efficiently as
possible to manage the
1 Campell T. (1981), Seven theories of human society, Oxford
University Press
16
‘Problem’, negotiate a ‘Settlement’, help ‘Preserve
Relationships’ and maintain ‘Value
for Money’.

Many people would not recognize a distinct difference between
the terms conflict and
dispute. Certainly most people would not concern themselves
with any definition.
Academics, and others, would usually make definition their
starting point. Definition
provides structure and structure may allow explanation and
understanding.
Conflict and dispute studies do form academic disciplines. Any
attempt here to
summarise the various strands of academic disciplines would be
doomed to failure and
debate on definition. In an attempt to avoid this, it is suggested
the following are some
of the areas of conflict and dispute studies:
• Peace and Conflict Studies – a social science
• Conflict Management as an Organisation Management Science
– part of
management science
• Conflict Management and Dispute Resolution – the concern of
this book

Functional and dysfunctional conflict
Early theory marked all conflict as a bad thing that should be
avoided. Amongst the
first to question this was Mary Parker Follett2;She said that
effective conflict
management ought not to conceive conflict as a wasteful
outbreak of incompatibilities,
but a normal process whereby socially valuable differences
register themselves for the
enrichment for all concerned. Three methods were advanced for
dealing with conflict:
domination, whereby there is a victory of one side over the
other (a win-lose
situation);
compromise, whereby each side gives up something in the
process (a lose-lose
situation);
and integration, whereby each side refocuses their efforts so
that neither side
loses anything and in fact each gains (a win-win situation).
Parker Follett recommended only integration this issue of
integration is returned to in

Negotiation [see chapter 5] and in Mediation [see chapter 6].
Follett believed that domination should be avoided at all costs.
Although application
of this strategy requires little effort on the part of the parties
and their agents, the long-
term side effects can be devastating. Compromise carries with
it the assumption that
both parties will be happy because each will gain something,
but each loses something
as well and this in turn creates the potential for further conflict.
Integration was
favoured simply because if both parties can become satisfied
there will remain no issue
or problem – obviously an ideal situation not easily attained.
Win-lose is often overused as a strategy for solving conflicts. It
assumes the use of
mental or physical power to bring about compliance; a lose-lose
approach will also
leave no one entirely happy. Compromise, side payments and
submission of the issue
2 Metcalf, H. (2003), Dynamic Administration: The Collected

Papers of Mary Parker Follett: Early
Sociology of Management and Organizations, Routledge
17
to a neutral third party, as in the arbitration procedure,
constitute examples of this latter
approach. The win-win approach, (now becoming more popular
although still
misunderstood), yields solutions satisfactory to all in that each
party to the conflict wins
something, and the conflict is therefore resolved constructively.
It could be suggested
that important conflicts tend to be best managed with positive-
sum (win-win) strategies,
while more trivial issues merit no more than zero-sum (win-
lose/lose-lose) strategies,
with most situations calling for contingency or mixed modes (no
win-no lose). The
concepts of integration and interest based approaches have
considerable influence in
negotiation, mediation and Game Theory

A further distinction between conflict and dispute that is
particularly useful is the one
which distinguishes the two based on time and issues in
contention.3 Disputes, this
suggests, are short-term disagreements that are relatively easy
to resolve. Long-term,
deep-rooted problems that involve seemingly non-negotiable
issues and are resistant to
resolution are referred to as conflicts. Though both types of
disagreement can occur
independently of one another, they may also be connected. In
fact, one way to think
about the difference between them is that short-term disputes
may exist within a larger,
longer conflict. A similar concept would be the notion of
battles, which occur within
the broader context of a war. Other theorists talk of strategy
and tactics; tactics win the
battle but strategy wins the war.
From this analysis of conflict and dispute it can be argued that
conflict is necessary and
inevitable but that disputes are to be avoided. The school of
Western thought which

maintains that conflict (but not dispute) is inevitable4. Conflict
is part of Western
societies and idioms; there is a Western dialectic argument
idiom to use the academic
jargon. Conflict is part of dynamic capitalism and an integral
part of commercialism;
conflict might be seen as the functional and necessary part.
Dispute on the other hand
only develops when conflict is not (or cannot be) managed .
Dispute, therefore, is the
unnecessary or dysfunctional element. Logically then there are
two areas for
consideration:
• Conflict Management: Here the emphasis is on the axiom that
it must be in all
parties interests to avoid disputes by managing conflict in such
a way that
disputes do not arise - sometimes described as dispute
avoidance.
• Dispute Resolution: Notwithstanding the emphasis on the
desire to avoid
dispute, there must be occasions where the parties have
legitimate disputes and

that the techniques of dispute resolution are employed to bring
about the
conclusion or resolution of the dispute.
The distinction between conflict and dispute is shown
diagrammatically in Figure 1.
It might be argued that at the dispute end of the continuum lies
other action [e.g.
violence]. Hopefully we will not have to consider this option.
3 Burton, J. W. (1993) Conflict Resolution as a Political
Philosophy. In: Conflict Resolution Theory and
Practice: Integration and Application (eds H. van der Merwe, D.
J. D. Sandole), Manchester University
Press
4 De Bono, E. (1985) Conflicts. Penguin, London.
18
Disputes on projects, or contracts, are more than unpleasant,
they divert valuable
resources from the overall aim, which must be completion: on
time, on budget and to

the quality specified. In addition they generally cost money,
take time and can destroy
relationships, which may have taken years to develop.
19
Dispute
Resolution
Conflict Management

Fig 1
Figure 1: Conflict Continuum
The legal issue conflict or dispute: Legal concerns about
conflict or dispute
Although the esoteric discussion earlier on conflict and dispute
is valuable, is there any
pragmatic real-world issue in the distinction? The legal point is
discussed as the
difference between behavioural conflict and justiciable
dispute5. The question as to
whether or not a dispute exists is highly relevant where an
arbitration or other dispute
resolution provision in a contract provides that disputes are to
be referred to arbitration
or other dispute resolution.

The meaning of the word dispute would at first sight seem to be
relatively
straightforward, indeed cases such as Hayter v Nelson (1990)6
and Cruden v
Commission for New Towns (1995)7 have stated that an
ordinary English word such as
dispute should be given its ordinary meaning. However there is
a considerable body of
case law concerning the question of what constitutes a dispute.
Much of that case law
5 Brown, H. and Marriot, A. (1994) ADR Principles and
Practice. Sweet and Maxwell, London.
6 23 Con LR
7 2 Lloyd's Rep 387
CONFLICT
DISPUTE
Conflict
Avoidance
Informal Negotiate
Discussion
ADR Arbitrate Litigate
Adjudicate

Other
Action
Violence
20
has been associated with arbitration and /or Construction
Adjudication under the
Housing Grants Construction and Regeneration Act. Section 108
of the Housing Grants
Construction and Regeneration Act provides that:
"A party to a construction contract has the right to refer a
dispute arising under the
contract for adjudication under a procedure complying with this
section. For this
purpose "dispute" includes any difference.”
It is extremely common in construction adjudication8 for the
responding party to allege
that it has not previously been given the opportunity to review
the case put forward by
the referring party and, therefore, that there is no dispute

capable of being referred to
construction adjudication. On the basis of this, the responding
party will contend that
the adjudicator does not have jurisdiction to deal with the
matter. In 2003 at least 4
cases were pursued on this point alone.
The case of Cowlin Construction Ltd v CFW Architects9
considered the question of
definition and in doing so the court provided a useful summary
of the relevant cases.
It appears from case-law that whilst there is no special meaning
to be given to the
meaning of the word dispute, there are certain factors to take
into consideration when
deciding whether or not there is a dispute. The approach
adopted by the courts is one
which attempts to prevent one party from ambushing the other
party. There seem to be
two schools of thought as to what is required for the
crystallisation of a dispute. The
wide approach advocated by Halki Shipping corporation v
Sopex Oils Ltd 10where a

claim made and not admitted is sufficient (Cowlin, Costain v
Wescol Steel11 and Orange
EBB v ABB12.). The narrow approach advocated by Carillion v
Devonport13 and Beck
Peppiatt v Norwest Holst Construction14 shows a reluctance to
allow ambushes and for
dispute resolution to be commenced prematurely.
The myriad of techniques used to resolve disputes
There has been considerable recent interest in dispute
resolution; particularly as a means
of making savings by optimising efficiency in dispute
resolution. In fact, the ‘Pledge to
Alternative Dispute Resolution (ADR)’ relaunched in 2011 as
the Dispute Resolution
Commitment is a central tenet of the UK government’s
commitment to greater
efficiency in dispute resolution
The following section reviews the main techniques available
(used) and compares three
key techniques. This is by no means an exhaustive or exclusive
list; there are

undoubtedly others, indeed one definition of ADR is
Appropriate Dispute Resolution
and there may be a ‘killer application’ yet to be devised.
The range of conflict management and dispute resolution
techniques include:
8 See Chapter 6
9 [2002] EWHC 2914 TCC
10 [1998] 1 WLR 727
11 [2003] EWHC 312
12 [2003] EWHC 1187 TCC
13 [2005] EWCA Civ 1358
14 [2003] BLR 316.
21
Conflict management/ dispute avoidance: incorporates a variety
of techniques some
used consciously and some subliminal to avoid the escalation
from normal conflict into
dispute. Examples might include: risk management to ensure
that risks are identified;
analysed and managed; procurement strategies to ensure that
risks are appropriately

allocated and contractual arrangements to allow sensible
administration. Specific
examples include: Clearer Project Definition; Equitable Risk
Allocation; Improved
Procurement and Tendering Procedures; and Partnering or
Relationship Contracting.
Negotiation: this is easily the most common form of dispute
resolution, carried out in
many forms every day by just about everybody. In negotiation
the parties themselves
attempt to settle their differences using a range of techniques
from concession and
compromise to coerce and confront.
Mediation: a private and non-binding form of dispute resolution
where an independent
third party [neutral] facilitates the parties reaching their own
agreement to settle a
dispute. Mediation is often a structured process where the
settlement becomes a legally
binding contract.
Conciliation: a process of mediation where the neutral proposes
a solution. In the same
way that we distinguished between a continuum of conflict and
dispute; a continuum

of mediation and conciliation shows mediation at one
facilitative end and conciliation
at the other evaluative end of the continuum
Med-arb: is a combination of mediation and arbitration where
the parties agree to
mediate but if that fails to achieve a settlement the dispute is
referred to arbitration. The
same person may act as mediator and arbitrator in this type of
arrangement.
Dispute Resolution Adviser (DRA): The concept of DRA is the
use of an independent
intervener. This independent intervener is paid for equally by
the employer and the
contractor to settle disputes as they emerged; rather than wait
until the end of the
contract.
Dispute Review Boards (and Dispute Review Panel and Dispute
Avoidance Panel and
Dispute Adjudication Panels): Dispute Review Board is a
process where an
independent board evaluate disputes.
Neutral evaluation: a private and non-binding technique where a
third, neutral party

(often legally qualified), gives an opinion on the likely outcome
at trail as a basis for
settlement discussions.
Expert Determination (Submission to Expert, Reference to an
Expert, Expert
Adjudication): these are long-established procedures in English
law and have been used
across a number of industries. Examples include: accountants
valuing shares in limited
companies, valuers fixing the price of goods, actuaries carrying
out valuations for
pension schemes, certifiers of liability for on-demand
performance bonds, and
Adjudicators who are said to be acting “as expert and not as
arbitrator”.
Mini-Trial (or Executive Tribunal): This is a voluntary non-
binding process. The
parties involved present their respective cases to a panel
comprised of senior members
of their organisation. The panel is assisted by a neutral
facilitator and has decision-
making authority. After hearing presentations from both sides,
the panel ask clarifying

questions and then the facilitator assists the senior party
representatives in their attempt
to negotiate a settlement.
Construction adjudication: this refers to Statutory Adjudication
in Construction
Disputes as set out in the Housing Grants, Construction
Regeneration Act 1996. Here
decisions of an adjudicator are binding on the parties at least
until a further process is
invoked (Arbitration or Litigation).
22
Arbitration: a formal, private and binding process where
disputes are resolved by an
award of independent tribunal (third party or parties, the
arbitrator or arbitrators). The
tribunal is either agreed by the parties or nominated by a further
independent body: for
example, a court or a professional institution.
Litigation: the formal process whereby claims are taken through
court and conducted
in public; judgements are binding on the parties subject to

rights of appeal.
Each of these, but not litigation, are considered later.
The stages of conflict management and dispute resolution
The stages of conflict management and dispute resolution are
usefully described in a
document produced by the Office of Government Commerce:
Dispute Resolution
Guidance 15. The stages are:
• Stage 1: Negotiation
• Stage 2: Non Binding Techniques and Processes
• Stage 3: Binding Techniques and Processes
This epitomises the current approach which seeks to make
savings by optimising
efficiency in dispute resolution; there is strong support for this
in the UK by
Government and internationally by research teams such as those
at Havard 16and
Cornell 17.

15 http://www.ogc.gov.uk/documents/dispute_resolution.pdf
16 Sander, F. (1976) The Muti-door Court House. 70 F.R.D.
111, Harvard
17 Lipsky, D. B. and Seeber, R. L (1998) The Appropriate
Resolution of Corporate Disputes: A Report
on the Growing Use of ADR by US. Corporations. Institute on
Conflict Resolution, Cornell
23
The Principal Stages and The Dispute Resolution Options are
shown at Figures 2 and 3.
Figure 2 The Principal Stages of Dispute Resolution
STAGE 1 STAGE 3 STAGE 2
NEGOTIATION
Mediation
Conciliation

Neutral Evaluation
Construction
Adjudication
Expert
Determination
Arbitration
Litigation
24
Figure 3 Dispute Resolution Options
METHOD COMMO
N LAW/
STATUTE
BASIS
FREQUENC
Y
OF USE

SPEED COST CONFIDENTIALIT
Y
BINDIN
G
ADVERSARIA
L
SPECIAL
FEATURE
S
Stage 1
Negotiation No Very Common
Ubiquitous
Varies Low Yes No No Can
continue
throughout
the dispute
Stage 2
Mediation No Common Fast Low Yes No (unless

agreed)
No
Conciliation No Fairly
Common
Fast Low Yes No (unless
agreed)
No Often
included
with
mediation
Neutral
Evaluation
No Infrequent Fast Low Yes No No
Adjudication Yes Common Fast Low Yes Yes (until
completio
n or
Arb/Lit)
Yes Statutory

adjudication
is
construction
specific
Stage 3
Arbitration Yes Common Contingen
t
Contingen
t
Yes Yes Yes
25
Expert
Determinatio
n
No Fairly
Common

Fast Moderate Yes Yes Yes
Litigation Yes Common Slow High No Yes Yes
26
Comparison of litigation, with construction adjudication,
arbitration and mediation
It is useful to compare and contrast the major dispute resolution
techniques in areas where the
characteristics of each technique are highlighted. Litigation,
Construction Adjudication,
Arbitration and Mediation are compared under the following
headings:
• Formality
• Speed
• Flexibility
• Cost
• Confidentiality
• Relationships
• Control and Choice

•
Solution
s
Formality
Mediation is an informal process; the parties may agree to
certain mediation rules but they are
at liberty to amend any rules. It is often said that the parties are
in control of the settlement, but
the mediator is in charge of the process There is no requirement
to produce specified
information before the mediation can commence, neither is
there a requirement to spend
resources filing and serving documents. Mediation is informal
and uncomplicated.

Construction adjudication is an informal process and the
procedure is, within certain bounds, at
the discretion of the adjudicator. Arbitration has been criticised
for mimicking litigation; many
steps have been taken to redress this and arbitrations are less
formal, nevertheless arbitration
may be considered formal and complicated when compared with
mediation. Litigation is,
properly, a highly formalised process with specialised rules;
non-compliance may prevent
litigation proceeding. Resources have to be committed in filing
and serving documents.
Litigation is a highly formal and complicated process.
Speed

In mediation the timing is within the control of the parties;
subject to the availability of suitable
and acceptable mediators mediation may take place as quickly
as the parties desire. The length
of the mediation is similarly in the control of the parties; they
can agree to stay as long, or as
briefly, as required. The great majority of mediations are
restricted to one working day or less.
Construction adjudication operates under very tight timescales
laid down by legislation; see
above the maximum time from notice to decision is 35 days
which may be extended by
agreement to 49 days. Speed is often claimed as a feature of
Arbitration; however the reality is
that the availability of all the parties involved, not least the
arbitrators, dictate that the process
is often protracted. Litigation is often an infuriatingly slow

process; in many jurisdictions
advisors talk in terms of years rather than months as the
timescale for trial dates. Although
many great strides have been taken in many countries to address
this, in the UK the Civil
Procedure Rules following the Woolf Review of Civil Justice is
a particular example, time
continues to be an issue.
Flexibility
Mediation is a flexible process; all arrangements can be
changed if necessary if it becomes
apparent that this is necessary. Arbitration can share much of
this flexibility and the 1996

27
Arbitration Act has given arbitrators wide ranging powers to
achieve flexibility. Adjudicators
too have much scope for flexibility. Litigation is an inflexible
process, specific steps must be
taken to initiate and progress matters.
Cost
Mediation is an inexpensive process; this is achieved and
facilitated by the informality and
speed of the process. The amount of lawyer involvement can be
reduced if the parties agree
and in many cases the cost of preparing for mediation is
marginal to the other preparation. The
parties can share the costs associated with the mediation in an

agreed fashion. Construction
adjudication can be an inexpensive process as a result of the
tight timescales. Arbitration can
certainly help in reducing costs and dealing with a dispute in a
proportionate manner. In
comparison to litigation it must be remembered that while the
state pays for majority of the
courts and judge’s costs s in many cases, in arbitration the
parties must pay the arbitrators costs.
Litigation is an expensive process; this is dictated by the
formality and slowness of the process.
There are many, many examples of the disproportionate costs of
litigation. Amongst the most
famous is the Dickens’s Bleak House example of Jarndyce v
Jarndyce where the parties
disputing a will expended the entire legacy in legal costs when
they disputed the terms of the

will!
Confidentiality
Here things are clear; in construction adjudication, arbitration
and mediation all matters are
confidential. This is an important issue for commercial disputes
where the parties often wish
to avoid publicity and to keep commercial confidentialities.
There is an issue often where
arbitration awards are the subject of appeal or referral to the
courts; then all matters will become
public. Litigation is a public matter and though civil
commercial litigation seldom attract
tabloid press interest; it is clear that litigation can expose
confidential issues.

Relationships
Again a clear difference: Mediation is a non-adversarial process
while litigation and arbitration
are both adversarial. Construction adjudication may avoid the
dysfunctional aspects of
adversarialism. In facilitative mediation [see Chapter 6] the
parties do not seek to convince the
neutral that they are in the right; or that others are in the wrong.
The emphasis of facilitative
mediation is on the parties’ interests as opposed to parties’
rights. As a result mediation need
not affect working relationships in an adverse manner.
Sometimes mediation may improve
relationships as parties achieve an improved understanding of
underlying interests and

concerns. Litigation and Arbitration on the other hand are not
conducive to even maintaining
relationships let alone improving them. Opposing parties aim to
convince the tribunal that the
law and the facts support their argument to the detriment of the
other side; this seldom helps
relationships and often destroys them. Construction
adjudication allows the power imbalance
in relationships to be dealt with in that weaker sub-contractors
have a clear route to deal with
more powerful contractors.
Control and Choice
In mediation the control of the dispute always remains with the
parties and the choice is theirs.
Who will be the mediator; where will the mediation take place;

when will it take place; and
who will attend. Mediation is a voluntary process and the
parties remain in control. This control
28
means that the parties have to ‘buy in’ to the settlement and any
resolution becomes their own
settlement. Litigation, Construction adjudication and
Arbitration hands over the dispute to the
lawyers and the judge or arbitrator or adjudicator. The process
passes control and choice in a
similar fashion.

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