Dispute resolution mechanisms for business
There should be a framework for resolving disputes between business enterprises in a fair and transparent manner.
The dispute resolution mechanisms should provide a reasonably fast, cost-effective and confidential resolution between the parties.
Business law should take account of the fact that disputes will arise. The mechanisms available for dispute resolution can include mediation, arbitration and use of formal court proceedings. Each has its place and offers particular benefits. Where the parties take their dispute to formal litigation there should be an independent court system that deals justly and at proportionate cost with disputes, allied to an expectation of reasonable publicity for the decision.
Arbitration bodies should consider publishing principles of decisions for the benefit of other businesses. The availability of digests of principles and decisions will enable other parties to disagreements to anticipate the probable outcome at arbitration, reducing the need for formal processes. In jurisdictions where arbitration clauses are compulsory in commercial agreements, recourse to the courts is comparatively rare, reducing the burden on society of regulating private disputes.
A balance will always need to be struck between the benefits to society of full transparency of process and decision-making as against the efficiency and utility of a confidential process that may encourage parties to compromise more readily for the mutual benefit of the parties and society.