tag:theconversation.com,2011:/au/topics/dispute-resolution-methods-28602/articlesDispute resolution methods – The Conversation2015-11-24T02:17:58Ztag:theconversation.com,2011:article/511182015-11-24T02:17:58Z2015-11-24T02:17:58ZMany wrongs can make a right: how mass redress schemes can replace court action<figure><img src="https://images.theconversation.com/files/102919/original/image-20151124-18227-1puwrus.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Class actions are often expensive and long-running.</span> <span class="attribution"><span class="source">Image sourced from www.shutterstock.com</span></span></figcaption></figure><p>Modern society is characterised by mass manufacturing, mass investment and mass consumption which give rise to “mass wrongs” - and the need for a system of mass redress.</p>
<p>Reports of harm to underpaid employees, users of pay-day lending and financial advice, shareholders and consumers has seen the rise of the redress or resolution scheme which diverts disputes from the courts into a quasi-administrative/ alternative dispute resolution mechanism.</p>
<p>Resolution schemes were previously ad hoc – created to deal with a particular crisis. Well-known examples include the World Trade Centre Victims’ Compensation Fund in response to 9/11 and the Gulf Coast Claims Facility in response to the BP oil spill in the Gulf of Mexico. </p>
<p>In Australia redress schemes were set up by banks in response to claims arising from Storm Financial’s collapse and in relation to financial advisers, and 7-Eleven has funded the Independent Franchisee Review and Staff Claims Panel chaired by Allan Fels.</p>
<p>However, the resolution scheme is becoming entrenched as a response to mass harm. In the UK the Consumer Rights Act 2015 permits a business to submit a voluntary redress scheme to the Competition and Markets Authority for approval as a mechanism to compensate customers. </p>
<p>In Australia the Australian Securities and Investments Commission (ASIC) has announced that it will develop a regulatory guide on review and remediation programs conducted by Australian financial services licensees that provide financial advice.</p>
<p>Why are the US, UK and Australia converging on resolution schemes as a solution to mass redress?</p>
<p>Potential defendants have an incentive to develop such schemes as they can avoid the high costs and risks of litigation. Corporations can deal with disputes that may adversely impact reputation and customer perceptions proactively. The resolution scheme can give real meaning to a corporate apology – it is the company putting its money where its mouth is. They can also incorporate flexible remedies beyond just financial payments.</p>
<p>The problem with resolution schemes is that the rule of law is replaced with consent and due process replaced with administrative steps. The public resolution of a dispute by an independent judiciary considering evidence, applying the law and giving reasons for a decision is lost.</p>
<p>Yet consumers are also attracted to schemes because they don’t have to incur the costs of litigation. The court system has tried to deal with mass harm through the class action. The class action can reduce the costs an individual would face compared to bringing litigation alone and, when coupled with litigation funding, provide protection against costs orders if a claim is unsuccessful. However, class actions are expensive. </p>
<p>For example the <a href="http://www.supremecourt.vic.gov.au/home/law+and+practice/class+actions/kilmore+east+kinglake+bushfire+class+action+settlement/">Kilmore East-Kinglake bush fire class action</a>, launched following the devastation of Victoria’s 2009 Black Saturday fires, recovered $494 million but $60 million went on legal fees. </p>
<p>In the <a href="http://www.smh.com.au/business/court-approves-centros-200m-classaction-settlement-20120619-20m2m.html">Centro shareholder class action</a>, $30 million from a $200 million settlement went on legal fees and then the litigation funders took about another 40%. But it can be worse. In the <a href="http://asic.gov.au/about-asic/media-centre/key-matters/information-for-great-southern-growers/">Great Southern financial product class action</a> a settlement of $23.8 million was reached - but $20 million went in legal fees.</p>
<p>Further, most class actions settle. There is no application of the law, reasons or precedent. After a settlement is reached a class action looks a lot like a confidential resolution scheme. Group members seek to substantiate their claims to an administrator, who applies some sort of formula to allocate the available funds.</p>
<p>The resolution scheme is a natural response to a court system, even with class actions, that is too expensive. The class action seemed to offer great hope through sharing of costs and economies of scale. However, class actions seem unable to deliver compensation as cheaply as resolution schemes.</p>
<p>However, the least cost option will be less attractive if it fails to fairly and equitably compensate consumers. Care needs to be taken that resolution schemes, especially those designed by corporations, are not tilted in the stronger parties’ favour or lack transparency. </p>
<p>This is why regulators are taking such interest in how a redress scheme will operate and want to see appropriate governance structures and procedures for independent review. Regulatory oversight will be used to promote just compensation.</p>
<p>Litigation will be the bogeyman that awaits disputants who cannot devise fair and effective resolution schemes for mass harm.</p><img src="https://counter.theconversation.com/content/51118/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Michael Legg is affiliated with Jones Day, Law Council of Australia Class Actions Committee and the Australia Pro Bono Centre.</span></em></p>Mass redress systems, rather than class actions, may be the least costly and most effective way to deliver compensation to large groups.Michael Legg, Associate Professor of Law, UNSW SydneyLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/440652015-07-22T18:19:34Z2015-07-22T18:19:34ZCould ‘Insight Policing’ have saved Sandra Bland, Freddie Gray and others?<figure><img src="https://images.theconversation.com/files/89371/original/image-20150722-1487-18c41ib.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Sandra Bland (left) died in jail after a routine traffic stop in Texas. Freddie Gray died after suffering a spinal injury while in police custody.</span> <span class="attribution"><a class="source" href="https://www.wikipedia.org">Wikipedia</a>, <a class="license" href="http://creativecommons.org/licenses/by-sa/4.0/">CC BY-SA</a></span></figcaption></figure><p>The disturbing <a href="http://www.nytimes.com/2015/07/22/us/sandra-bland-was-combative-texas-arrest-report-says.html?ref=us">video</a> released earlier this week of the stop and arrest of Sandra Bland highlights once again the excessive and inexcusable use of force by police officers in this country. The 28-year-old’s death in police custody after a routine traffic stop is currently being investigated as a murder. </p>
<p>Both ordinary citizens and experts have been calling for police departments to ramp up efforts to stop these kinds of abuses, but tragically, they continue. </p>
<p>Why they continue is perplexing and complicated – from history and power to the role of implicit bias. But one answer, as a Memphis cop put it to me in an interview for the <a href="http://www.insightconflictresolution.org/retaliatory-violence-insight-project.html">Retaliatory Violence Insight Project</a>, is what police officers call the “tricky part”: maintaining trust with citizens while enforcing the law.</p>
<h2>The tricky part</h2>
<p>Part of what is tricky, I found talking with police officers, is that traditional policing practice uses deterrence methods – force and the threat of punishment – to motivate compliance. </p>
<p>Most of us are familiar with these methods. Perhaps we have gotten a speeding ticket, or been subject to stop and frisk. The principle is the same – obey the law or face consequences. </p>
<p>Deterrence policies may stop crime in some cases, but they are counter to most people’s conception of <a href="http://aisel.aisnet.org/cgi/viewcontent.cgi?article=1876&context=amcis2000">trust</a>, which depends on the belief that another person will not cause harm. </p>
<p>Because of this trust deficit, <a href="http://courses.washington.edu/pbafhall/514/514%20Readings/tyler%20justice.pdf">deterrence methods can fail</a> to produce compliance; and instead, produce <a href="http://www.huffingtonpost.com/2015/06/30/ferguson-protests-police-response_n_7698548.html">conflict</a> between the public and the police. Just watch Sandra Bland’s arrest video, or the public reaction to the high-force police response during last year’s <a href="http://boingboing.net/2014/08/14/video-standoff-in-ferguson-a.html">Ferguson protests</a>. </p>
<p>Research from the Retaliatory Violence Insight Project into the challenges police departments face curtailing retaliatory violence in high crime communities has produced an alternative: Insight Policing.</p>
<p><a href="http://www.insightconflictresolution.org/insight-policing.html">Insight Policing</a> is a community-oriented, problem-solving policing practice designed to help officers take control of situations with the public before conflict escalates. By doing so, the police maintain trust and enhance the probability of cooperation in difficult situations of enforcement.</p>
<h2>The role of Insight Policing</h2>
<p>Insight Policing helps officers recognize and defuse conflict behavior when they see it – both their own and the public’s. Often, conflict behavior resembles such stress-based behaviors as fight, flight and freeze; these are the actions people take when they feel threatened.</p>
<p>The thing about conflict behavior, and what Insight Policing pays particular attention to, is that when we feel threatened, we are <a href="http://scar.gmu.edu/book-chapter/explaining-human-conflict-human-needs-theory-and-insight-approach">reactive</a>, not reflective, in how we respond. We do not take time to think about what we are doing, we simply <em>do,</em> in hopes that we will successfully stop the threat.</p>
<p>Sandra Bland refused to get out of her car (conflict behavior), responding to the threat the officer posed when he ordered her to. The officer pulled a taser on Bland (conflict behavior) in response to the threat her refusal posed to him as an agent of the law.</p>
<p>While clearly there are more dramatic instances of conflict behavior in police–citizen encounters – the high speed chase, the standoff – the more mundane conflict interactions are what are undermining police legitimacy.</p>
<p>When conflict behavior manifests as noncompliance, when citizens refuse to cooperate, as was the case with <a href="http://www.nytimes.com/2014/07/19/nyregion/staten-island-man-dies-after-he-is-put-in-chokehold-during-arrest.html?_r=1">Eric Garner</a>, <a href="http://www.justice.gov/sites/default/files/opa/press-releases/attachments/2015/03/04/doj_report_on_shooting_of_michael_brown_1.pdf">Mike Brown</a>, <a href="http://www.baltimoresun.com/news/maryland/crime/blog/bal-charging-documents-for-freddie-gray-20150420-htmlstory.html">Freddie Gray</a> and most recently <a href="http://www.nytimes.com/2015/07/22/us/sandra-bland-was-combative-texas-arrest-report-says.html?ref=us">Sandra Bland</a>, what begins as mundane can become lethal when conflict behavior escalates. </p>
<p>Insight Policing, which has been piloted in two American police departments, Memphis, Tennessee, and Lowell, Massachusetts, is a promising tool for helping officers get a handle on the “tricky part.” Eighty percent of officers trained agreed that Insight Policing enhanced their ability to defuse the feelings of threat citizens have about their encounters with police officers. </p>
<h2>An example of Insight Policing</h2>
<p>Take an example from Memphis. Three Memphis officers trained in Insight Policing responded to a call for shots fired. They arrived on the scene to find a crowd of young men behind a house. They asked them the kinds of questions they always ask at the scene of a crime: “What happened?” “What did you see?” “Who did this?” The young men refused to cooperate: “We didn’t see anything.” “Leave us alone.” “We don’t know what you’re talking about.” </p>
<p>The officers suspected otherwise. And ordinarily, they reported, they would have arrested the young men on gang-related charges and questioned them down at the station – to delay any retaliation that might have been brewing as well as to get the information they were after. Instead, having been trained in Insight Policing, they recognized the young men’s resistance as conflict behavior. They dropped, for the moment, their crime investigator hats, and put on their conflict investigator hats. They used Insight Policing techniques to become curious about what was motivating the young men’s resistance. </p>
<p>What the officers found was not that the young men were protecting somebody or hiding something or breaking the law in some way, but that they had had trouble with police in the past. They did not want to speak because they were afraid of incriminating themselves.</p>
<p>Getting this information allowed the officers to delink the threat they posed by assuring the young men that they were not after them, they were after the shooter. They were able to build enough trust in the moment that the young men gave them the information they needed to catch the shooter later that night. </p>
<p>Had the officers used their power to arrest the young men, just for hanging out together, they would have played into the young men’s fear of incrimination. They would have escalated a situation, and who knows how it would have turned out. </p>
<p>By engaging the men in terms of their conflict behavior, the officers were able to build trust, garner cooperation and effectively enforce the law. </p>
<p>What if the officers who stopped Sandra Bland and Freddie Gray and Mike Brown and Eric Garner had been trained to recognize conflict behavior and defuse it? Perhaps history would be different.</p><img src="https://counter.theconversation.com/content/44065/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Megan Price is Director of the Insight Conflict Resolution Program at George Mason University's School for Conflict Analysis and Resolution. She contributed to the development of Insight Policing through the Retaliatory Violence Insight Project, funded by the US Department of Justice, Bureau of Justice Assistance. </span></em></p>Police in Lowell, Massachusetts and Memphis, Tennessee are using a new approach designed to help them build trust while enforcing the law.Megan Price, Director, Insight Conflict Resolution Program at the School for Conflict Analysis and Resolution, George Mason University, George Mason UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/238262014-03-06T03:39:44Z2014-03-06T03:39:44ZSport in conflict: can cricket heal war-torn Afghanistan?<figure><img src="https://images.theconversation.com/files/43247/original/c2mbpmvx-1394068938.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Could Afghanistan's cricketers become unlikely ambassadors for their country and bring relief to it in its current state of volatility?</span> <span class="attribution"><span class="source">Afghanistan Cricket Board</span></span></figcaption></figure><p>Sport has emerged as an unlikely hero for one nation that continues to deal with violent internal conflicts. Afghanistan <a href="http://www.abc.net.au/news/2014-02-18/afghanistan-u19s-beat-australia-at-world-cup/5266328">beat</a> Australia at last month’s under-19 Cricket World Cup in Abu Dhabi, while the war-torn nation’s senior team has just been eliminated from the Asia Cup tournament.</p>
<p>Beating Australia’s under-19 team is no small feat. But it is their ability to bring together and sustain a successful team under trying political circumstances that is perhaps the most remarkable achievement of these Afghan cricketers.</p>
<p>So, could the cricketers become unlikely ambassadors for their country and help Afghanistan in its current state of volatility? After all, we have seen before how sport can break down barriers in nations torn by conflict, if only temporarily.</p>
<p>In 2007, Iraq’s national soccer team completed one of sport’s great fairytales by winning the Asian Cup. The victory provided a rare moment for celebration in the war-torn nation. As Iraq’s Brazilian coach Jorvan Vieira <a href="http://uk.reuters.com/article/2007/07/29/uk-soccer-asia-idUKSP26426720070729">told a news conference</a> following his side’s success:</p>
<blockquote>
<p>This has brought great happiness to a whole country. This is not about a team, this is about human beings.</p>
</blockquote>
<p>Today’s world leaders recognise the significance of sport as a platform for promoting peaceful co-existence. All 193 United Nations (UN) Member States co-sponsored the latest UN resolution on the <a href="http://www.olympic.org/content/the-ioc/commissions/international-relations-/olympic-truce/">Olympic Truce</a>, signing up to the ideals of peace and conflict resolution and the premise that sport should be free from interference of politics or religion.</p>
<p>South Africa’s first black president Nelson Mandela <a href="http://www.dailymail.co.uk/sport/article-2519097/Nelson-Mandela-dead-95-Sport-power-change-world.html">once said</a>: </p>
<figure class="align-right zoomable">
<a href="https://images.theconversation.com/files/43242/original/qq97swqw-1394068000.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/43242/original/qq97swqw-1394068000.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/43242/original/qq97swqw-1394068000.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=902&fit=crop&dpr=1 600w, https://images.theconversation.com/files/43242/original/qq97swqw-1394068000.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=902&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/43242/original/qq97swqw-1394068000.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=902&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/43242/original/qq97swqw-1394068000.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=1133&fit=crop&dpr=1 754w, https://images.theconversation.com/files/43242/original/qq97swqw-1394068000.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=1133&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/43242/original/qq97swqw-1394068000.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=1133&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">South African democracy icon Nelson Mandela used sport to heal a divided country.</span>
<span class="attribution"><span class="source">EPA/STR</span></span>
</figcaption>
</figure>
<blockquote>
<p>Sport has the power to change the world. It has the power to inspire. It has the power to unite people in a way that little else does. Sport can create hope where once there was only despair.</p>
</blockquote>
<p>Mandela famously used the South African national rugby team, the Springboks, to unite a then-divided nation around a common goal: to win the 1995 Rugby World Cup in South Africa. This presidential mission was immortalised in the 2009 film <a href="http://en.wikipedia.org/wiki/Invictus_(film)">Invictus</a>. One of Mandela’s celebrated <a href="http://content.time.com/time/magazine/article/0,9171,1821659,00.html">leadership lessons</a> was to: </p>
<blockquote>
<p>Know your enemy – and learn about his favorite sport.</p>
</blockquote>
<p>Success stories – there are a few. But unfortunately the reality is more complex. In light of the recent Winter Olympic Games in Sochi, which were overshadowed by controversy over <a href="http://www.theguardian.com/commentisfree/2014/feb/05/russia-anti-gay-law-criticism-playing-into-putin-hands">Russia’s anti-gay laws</a>, is elite sport not doing more harm than good when it comes to conflict resolution?</p>
<p>It is true that sport has excessive competition, racism, sexism, chauvinism and doping, so surely there are better ways to create a more peaceful world. Millions of Brazilians certainly think so. They have mounted a <a href="http://sports.ndtv.com/football/news/221231-massive-protests-against-brazils-world-cup-expenditure-despite-gloomy-economy">series of protests</a> against massive government expenditure on the hosting of the 2014 FIFA World Cup and the 2016 Olympic Games. Protesters declared:</p>
<blockquote>
<p>We don’t need the World Cup, we need health and education.</p>
</blockquote>
<p>While sport has at times contributed to bringing a sense of “normalcy” to volatile nations, more often it has served as a site for political conflict or the furthering of political and nationalistic objectives.</p>
<p>The United Arab Emirates has been accused of using soccer to <a href="http://www.theguardian.com/football/2013/jul/30/manchester-city-human-rights-accusations">launder</a> its image, which has been tarnished by autocratic and counter-revolutionary policies. The Sochi Games may also be viewed in this way, as activist Ruth Hunt <a href="http://www.independent.co.uk/voices/comment/as-the-olympic-flame-is-extinguished-in-sochi-homophobia-is-still-burning-bright-9147642.html">wrote</a>:</p>
<blockquote>
<p>As the Olympic flame is extinguished in Sochi, homophobia is still burning bright.</p>
</blockquote>
<p>It would be naïve to view sport, in and of itself, as being capable of transforming the types of conflict facing countries like Afghanistan or Iraq. If sport is to be a “saviour” for nations suffering conflict, then surely it must be used as but one small element in a comprehensive set of conflict transformation strategies.</p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/43241/original/6hhvnsxd-1394067929.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/43241/original/6hhvnsxd-1394067929.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=405&fit=crop&dpr=1 600w, https://images.theconversation.com/files/43241/original/6hhvnsxd-1394067929.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=405&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/43241/original/6hhvnsxd-1394067929.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=405&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/43241/original/6hhvnsxd-1394067929.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=508&fit=crop&dpr=1 754w, https://images.theconversation.com/files/43241/original/6hhvnsxd-1394067929.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=508&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/43241/original/6hhvnsxd-1394067929.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=508&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">The Iraqi soccer team’s victory in the 2007 Asian Cup provided the nation with a rare moment of celebration.</span>
<span class="attribution"><span class="source">AAP/Bagus Indahono</span></span>
</figcaption>
</figure>
<p>The journey of cricket in Afghanistan is inspiring and we can draw some positives from it. It validates the idea that bringing people together into a sporting arena can potentially contribute to the assertion of a shared citizenship, or at least serve as a temporary escape from political and social tensions. </p>
<p>However, with such short-term success comes immediate challenges. Cricket is the only sport that the Taliban approves of as trousers and protective padding cover most body parts. Recently, the Pakistani government engaged in <a href="http://timesofindia.indiatimes.com/home/opinion/edit-page/Cricket-diplomacy-may-give-Pakistan-Taliban-peace-talks-new-drive/articleshow/31056786.cms">“cricket diplomacy”</a> by offering the Taliban a cricket match to revive peace talks. They declined the offer, but continue to use cricket as a means of expressing their views about the world. </p>
<p>When the great Indian batsman Sachin Tendulkar retired last year, a Pakistani Taliban spokesperson <a href="http://www.theguardian.com/world/2013/nov/28/taliban-media-unpatriotic-sachin-tendulkar">criticised</a> those who acknowledged Tendulkar’s brilliance because he was an Indian. Tendulkar was “against the Pakistani nation and our motherland”. Clearly, Afghanistan’s success can very quickly be hijacked by those who are not interested in nation building.</p>
<p>Sport is not a panacea for violent conflict. It can provide a window of opportunity during which small gains can be made towards greater mutual recognition and solidarity. But even then, one has to be vigilant about those who incite the violence in the first place.</p>
<p>With this in mind, our eyes are already on the 2015 Cricket World Cup, to be hosted by Australia and New Zealand. Can the Afghanistan cricketers repeat their success, and, in doing so, bring some happiness to their homeland? Or will it be the Taliban that will claim victory in the battle for association with cricketing success?</p><img src="https://counter.theconversation.com/content/23826/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Ramon Spaaij receives funding from the Australian Research Council.</span></em></p><p class="fine-print"><em><span>Hans Westerbeek does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Sport has emerged as an unlikely hero for one nation that continues to deal with violent internal conflicts. Afghanistan beat Australia at last month’s under-19 Cricket World Cup in Abu Dhabi, while the…Ramon Spaaij, Associate Professor, Victoria UniversityHans Westerbeek, Dean, College of Sport and Exercise Science and Institute of Sport, Exercise, Active Living, Victoria UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/204832013-11-20T03:39:19Z2013-11-20T03:39:19ZColes and Woolworths code useful, but beware disputes<figure><img src="https://images.theconversation.com/files/35641/original/pbc9vjq6-1384909251.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">A new grocery code of conduct provides new rules for a sector subject to price wars, but will not solve all market problems.</span> <span class="attribution"><span class="source">Lukas Coch/AAP</span></span></figcaption></figure><p>Coles, Woolworths and the Food and Grocery Council have released a <a href="http://images.smh.com.au/file/2013/11/18/4933032/codeofconduct.pdf?rand=1384740257431">draft industry code of conduct</a> to help govern their relationships with suppliers. </p>
<p>The code will be “voluntary” under section 51AE of the <a href="http://www.comlaw.gov.au/Details/C2011C00003/Html/Volume_1#param364">Competition and Consumer Act</a>. But this doesn’t mean it is toothless.</p>
<p>It comes after a <a href="http://au.news.yahoo.com/a/19080717/fed-up-farmers-unite-to-fight-supermarket-price-war-with-code-of-conduct/">push</a> by farmers for a mandatory code of conduct as they sought protection from price gouging in the light of the ongoing supermarket price wars.</p>
<p>Given that Coles and Woolworths will be signatories, most of the supermarket industry will be on board from day one.</p>
<p>Once prescribed in regulations, the code will be enforceable by the Australian Competition and Consumer Commission (ACCC) and the courts. The law in section 51AD of the Act is very clear:</p>
<blockquote>
<p>“A corporation must not, in trade or commerce, contravene an applicable industry code.”</p>
</blockquote>
<p>If a corporation does breach the code, the courts can fix the breach, for example by voiding or varying contracts.</p>
<p>So what is the grocery industry signing up to?</p>
<p>First, the code is in addition to current laws. Coles and Woolworths are still bound by all of our competition and consumer laws.</p>
<p>The code will make clear the grocery supply agreements between retailers and suppliers. The code requires agreements up-front and in writing. Unsophisticated suppliers, who may have acted on ambiguous verbal “understandings”, will benefit from this formality. It will avoid nasty surprises – so long as the suppliers carefully read and understand their agreement!</p>
<p>Agreements cannot include behaviour that, arguably, would be unconscionable and illegal anyway. For example, unilateral, retrospective variations are ruled out. This benefits suppliers by avoiding uncertain legal proceedings. As the recent <a href="http://www.buseco.monash.edu.au/mbpf/papers.html">Monash Business Policy Forum paper</a> noted, the law on unconscionable conduct has been difficult to interpret. In contrast, the code clearly rules certain behaviour out-of-bounds.</p>
<p>The code establishes rules for own-label products and for suppliers’ intellectual property and “innovation” rights. This will help suppliers have frank discussions with supermarkets about potential new products, and should benefit both suppliers and retailers.</p>
<p>The weakness of the code, however, is the dispute resolution procedures. </p>
<p>The first point-of-call for a complaint is the retailer-appointed “Code Compliance Manager”. It is reasonable that the retailer is given a chance to resolve a complaint internally before external intervention. However, if this route fails, the next stage is internal dispute resolution then external mediation and arbitration. These fall back options will be time consuming and costly, particularly for a small supplier. So I suspect that, in many situations, the decision of the Code Compliance Manager will be final. And this Manager is not arms-length from the retailer.</p>
<p>Of course, the supplier can always call in the ACCC if the Act has been breached. But they can do this without the code.</p>
<p>A better approach would be to have an independent Code Compliance Manager to deal with disputes up-front. The manager could be funded jointly by the retailers but appointed by both the retailers and suppliers. The decisions of such an independent umpire will have more weight.</p>
<p>Claims of abuse of suppliers by supermarkets are not new or unique to Australia. Chapter 9 of the UK Commerce Commission’s <a href="http://www.competition-commission.org.uk/our-work/directory-of-all-inquiries/groceries-market-investigation-and-remittal/final-report-and-appendices-glossary-inquiry">2008 inquiry</a> into supermarkets looked at supermarket “buyer power”. The main concern was retailers making “retrospective adjustments to the terms of supply”. The draft code should fix this problem in Australia.</p>
<p>The 2008 <a href="http://www.accc.gov.au/system/files/Grocery%20inquiry%20report%20-%20July%202008.pdf">ACCC grocery inquiry</a> also looked at buyer power. It concluded that the major supermarket chains have buyer power in that they “generally buy products on better trading terms than other buyers”. But that is not undesirable or anti-competitive by itself. The inquiry received many complaints, but little hard evidence, about unconscionable and anti-competitive conduct by the supermarkets against suppliers. And five years later, we are still waiting for any court cases. The code will help fix this problem by making it clear what conduct is disallowed.</p>
<p>But the code will not solve all market problems. Recent economic research highlights how buyer power may indirectly harm suppliers. Buyer power may lead to a <a href="http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2045485">waterbed effect</a>, where suppliers lower prices to the major supermarkets but then have to raise prices to other retailers in order to cover their costs.</p>
<p>Unpublished research by David Haines at Monash University shows how buyer power may create incentives for the retailer to undermine the “general” terms it offers suppliers in order to improve its bargaining position with specific suppliers. The ACCC grocery inquiry was often told that “the only thing worse than having a supply contract with a major supermarket chain, is not having a supply contract with a major supermarket chain”. The Monash research shows this may be due to the undermining of “outsiders” rather than benefiting chosen suppliers.</p>
<p>The code will not deal with these broader industry effects. And nor should it. A risk with industry codes is that they are used as collusive devices to undermine competition. Taking the code further would prevent real competition and harm consumers. It will not solve all supplier problems, but it will provide clarity and make it clear that the worst abuses of buyer power are illegal.</p><img src="https://counter.theconversation.com/content/20483/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Stephen King was a member of the ACCC from 2004 to 2009 and participated in its 2008 grocery inquiry.</span></em></p>Coles, Woolworths and the Food and Grocery Council have released a draft industry code of conduct to help govern their relationships with suppliers. The code will be “voluntary” under section 51AE of the…Stephen King, Professor, Department of Economics, Monash UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/45732011-12-11T19:19:15Z2011-12-11T19:19:15ZDo you need your day in court? The evolution of dispute resolution<figure><img src="https://images.theconversation.com/files/6263/original/h5vpr4qb-1323323222.jpg?ixlib=rb-1.1.0&rect=7%2C172%2C1053%2C944&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Alternative dispute resolution grew out of a desire to stay out of court.</span> <span class="attribution"><span class="source">AAP</span></span></figcaption></figure><p>As satisfying as it may seem to announce that you’ll see your adversary in court, a good lawyer may be duty bound to tell you otherwise.</p>
<p>Nowadays, the range of alternatives to litigation are so well developed that a dispute may be resolved without anyone ever taking the stand; and that means just about any party, from Qantas and the unions, to participants in a global cartel, to prospective celebrity divorcees like Kim Kardashian or even those fiercest of opponents, neighbours squabbling over the cost or alignment of a suburban fence.</p>
<p>Since at least the 1970s, there have been initiatives to develop more formal alternatives to litigation or court-based determination. I say more formal because negotiation and arbitration have existed for hundreds of years. But for many citizens, having their “day in court” is still seen as the exemplar of dispute resolution. </p>
<p>Alternative dispute resolution (ADR) grew out of a desire to empower and better meet the needs of disputants’ as well as dissatisfaction with the adversarial court system and its associated costs and delays. But the court system has not stood still and significant steps have been taken to combat the twin evils of cost and delay. Consequently, alternative dispute resolution is now being referred to as “appropriate dispute resolution”, as the emphasis shifts towards finding the best or most appropriate way of resolving a particular dispute.</p>
<p>Mediation has become an accepted, perhaps even highly sought after, method of dispute resolution in an extraordinary array of areas from commercial to family, native title, consumer, property and employment disputes.</p>
<figure class="align-left ">
<img alt="" src="https://images.theconversation.com/files/6265/original/7qrmwztm-1323323790.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/6265/original/7qrmwztm-1323323790.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=839&fit=crop&dpr=1 600w, https://images.theconversation.com/files/6265/original/7qrmwztm-1323323790.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=839&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/6265/original/7qrmwztm-1323323790.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=839&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/6265/original/7qrmwztm-1323323790.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=1054&fit=crop&dpr=1 754w, https://images.theconversation.com/files/6265/original/7qrmwztm-1323323790.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=1054&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/6265/original/7qrmwztm-1323323790.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=1054&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">The government has re-invigorated arbitration.</span>
<span class="attribution"><span class="source">AAP</span></span>
</figcaption>
</figure>
<p>Arbitration has been reinvigorated with the Federal Government seeking to establish Sydney as an arbitral hub for the resolution of international disputes with the opening of the Australian International Disputes Centre and the passage of amendments to the International Arbitration Act 1974 (Cth).</p>
<p>Further, the domestic use of arbitration has been bolstered by the <a href="http://www.austlii.edu.au/au/legis/nsw/consol_act/caa2010219/">Commercial Arbitration Act 2010</a> (NSW), which despite its name, can be applicable to a broad range of disputes.</p>
<p>Specialist subject-matter specific dispute resolution schemes have also boomed. The <a href="http://fos.org.au/centric/home_page.jsp">Financial Ombudsman Service</a> resolves disputes between consumers, including some small businesses, and member financial services providers. Similarly, the <a href="http://www.tio.com.au/">Telecommunications Industry Ombudsman</a> provides dispute resolution services for small business and residential customers who have a complaint about their telephone or internet service. There has also been a mainstreaming of other forms of dispute resolution, such as <a href="http://www.medarb.com/">Med-Arb</a>, facilitation and expert determination. </p>
<p>The growth in dispute resolution processes has not proceeded only by voluntary adoption. For some time now, courts have been able to refer parties to mediation over the protestations of both lawyers and clients. The courts also allow for early neutral evaluation and the use of referees. The matching of a process to a dispute has become part of the court’s case management “best practice” in seeking to do justice quickly and cheaply.</p>
<p>Since the enactment of the <a href="http://www.comlaw.gov.au/Details/C2011A00017">Commonwealth’s Civil Dispute Resolution Act 2011</a> (Cth), which commenced on 1 August of this year, disputants have been required to take “genuine steps” to resolve disputes before commencing proceedings.</p>
<p>Although the meaning of genuine steps is not specifically defined, a number of examples are put forward, such as consideration of the use of alternative dispute resolution processes with a view to resolving some or all of the issues in dispute. The court may take into account the genuine steps taken by a party in exercising the court’s discretion and powers, especially in relation to costs. Disputants are now obligated to consider if a non-court process could resolve the dispute.</p>
<p>However, the need to consider a range of options for resolving disputes other than litigation does not mean litigation should be ignored. The courts wield the power of the State, they interpret the laws, ensure procedural fairness and render binding decisions in public that authoritatively state the law for the parties involved, and society at large. </p>
<p>Frequently they achieve these goals without delay or exorbitant cost. Often they are innovative and accountable, through developments such as the Federal Court’s Fast Track and the concurrent hearing of expert evidence. These unique features may be needed for a particular dispute.</p>
<figure class="align-right ">
<img alt="" src="https://images.theconversation.com/files/6264/original/6jtcgkkk-1323323436.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/6264/original/6jtcgkkk-1323323436.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=852&fit=crop&dpr=1 600w, https://images.theconversation.com/files/6264/original/6jtcgkkk-1323323436.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=852&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/6264/original/6jtcgkkk-1323323436.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=852&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/6264/original/6jtcgkkk-1323323436.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=1070&fit=crop&dpr=1 754w, https://images.theconversation.com/files/6264/original/6jtcgkkk-1323323436.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=1070&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/6264/original/6jtcgkkk-1323323436.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=1070&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
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<span class="caption">ADR should go hand-in-hand with courts.</span>
<span class="attribution"><span class="source">AAP</span></span>
</figcaption>
</figure>
<p>The matching of a dispute to an appropriate process also operates within the courts as litigation is not a uniform process. Consideration needs to be given not just to what jurisdiction, court or list a case should be commenced in, but what procedural approaches should be pursued. For example, should a case be pursued one on one with an opponent or are other procedural devices such as class actions needed?</p>
<p>It also needs to be recognised that ADR and the courts may actually go hand in hand so that the most beneficial or efficient outcome may require a combination of both. Mediation may be desired but there still may be merit in invoking the court’s processes to facilitate the provision of essential information through discovery. </p>
<p>Appropriate dispute resolution necessitates an awareness of the range of dispute resolution processes that are available and consideration of the advantages and disadvantages of each process for the specific dispute.</p>
<p>As a result, a client seeking advice needs a lawyer that can deal with the merits of the dispute by applying substantive law to determine prospects of success but also by determining what process would be appropriate to attempt to resolve the dispute. Relevant factors in this selection include: costs, urgency, the desire for confidentiality, the need to maintain an ongoing relationship, types of remedies sought, whether a legal precedent is required and the need for the procedural protections of the court process.</p>
<p>Many options for dispute resolution are now well established. Reflexive resort to the courts is gone. Careful consideration of appropriate processes is the best service a lawyer can provide.</p>
<p>Suggested links:</p>
<p><strong><a href="http://www.leadr.com.au/adr.htm">LEADR - Association of Dispute Resolvers</a></strong></p>
<p><strong><a href="http://www.nadrac.gov.au/">National Alternative Dispute Resolution Advisory Council</a></strong></p>
<p><strong><a href="http://www.lawreform.vic.gov.au/resources/4/a/4ad3ac00404a1067a258fbf5f2791d4a/vlrc+civil+justice+review+-+report.pdf">Victorian law Reform Commission, Civil Justice Review</a></strong></p>
<p><em>Michael Legg is the Convenor of the UNSW Law’s 40th Anniversary conference, “<a href="http://www.law.unsw.edu.au/node/35991">Dispute Resolution in the Next 40 Years: Repertoire or Revolution”</a>, held on 1-2 December.</em></p><img src="https://counter.theconversation.com/content/4573/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Michael Legg does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>As satisfying as it may seem to announce that you’ll see your adversary in court, a good lawyer may be duty bound to tell you otherwise. Nowadays, the range of alternatives to litigation are so well developed…Michael Legg, Associate Professor of Law, UNSW SydneyLicensed as Creative Commons – attribution, no derivatives.