Dispute Resolution

Leveraging a longitudinal dataset concerning 102 inter-firm disputes, we evaluate the effects of contract structure on trust and on the likelihood of continued collaboration. We theoretically refine and empirically extend prior research by (a) distinguishing between control and coordination functions of contracts, (b) separating goodwill-based and competence-based trust, and (c) evaluating the effects of contract structure on relational outcomes in the context of disputes. We find that control provisions increase competence-based trust, but reduce goodwill-based trust, resulting in a net decrease in the likelihood of continued collaboration. Coordination provisions increase competence-based trust, leading to an increased likelihood of continued collaboration.

Systematic asymmetries in exchange behavior have been widely interpreted as support for “endowment effect theory,” an application of prospect theory positing that loss aversion and utility function kinks set by entitlements explain observed asymmetries. We experimentally test an alternative explanation, namely, that asymmetries are explained by classical preference theories finding influence through the experimental procedures typically used. Contrary to the predictions of endowment effect theory, we observe no asymmetries when we modify procedures to remove the influence of classical preference theories. When we return to traditional-type procedures, however, the asymmetries reappear. The results support explanations based in classical preference theories and reject endowment effect theory. (JEL D01)

This paper investigates how contract structure influences inter-firm dispute resolution processes and outcomes by examining a unique dataset consisting of over 150,000 pages of documents relating to 102 business disputes. We find that the level of contract detail affects the type of dispute resolution approach that is adopted when conflict arises, and that different approaches are associated with different costs for resolving the dispute. We also find that the effect of contract choice on dispute resolution approach is moderated by the degree of coordination required in the relationship, and that the effect of dispute approach on costs is moderated by the degree of power asymmetry between the parties. Thus, even after controlling for various attributes of the exchange relationship and the dispute, the choice of contracting structure has important strategic implications.

Courts and commentators have typically assumed that binding arbitration is both private and consensual, and that it therefore raises no constitutional concerns. This Article challenges both assumptions and goes on to consider arguments that arbitration agreements may unconstitutionally deprive persons of their right to a jury trial, to a judge, and to due process of law. The author argues first that courts' interpretation of seemingly private arbitration agreements may often give rise to "state action," particularly where courts have used a "preference favoring arbitration over litigation" to construe a contract in a non-neutral fashion. The author next draws on the Supreme Court's decisions governing waiver of constitutional rights to argue that arbitration agreements are invalid where they are unclear, and further contends that many unknowing or coercive agreements are invalid as well. Having demonstrated the relevance of constitutional analysis to ma...

Finally, Part III will focus on the broader societal impact of mandatory arbitration. Clearly the use of mandatory arbitration is curtailing the use of jury trials and class actions, is leading to fewer precedential decisions, and is limiting public access to our justice system. While many ...

Despite substantial scholarly interest in the role of contracts in alliances, few studies have analyzed the mechanisms and conditions relevant to their influence on alliance performance. In this paper, we build on the information-processing view of the firm to study contracts as framing devices. We suggest that the effects of contracts depend on the types of provisions included and differentiate between the consequences of control and coordination provisions. Specifically, control provisions will increase the level of conflict between alliance partners, whereas coordination provisions will decrease such conflict. Conflict, in turn, reduces alliance performance, suggesting a mediated relationship between alliance contracts and performance. We also contribute to a better understanding of contextual influences on the consequences of contracts and investigate the interactions of each contractual function with both internal and external uncertainties. Key informant survey data on 171 alliances largely support our conceptual model.

Parallel to the proliferation of transnational corporations, the corporate impact on human rights has increased. Meanwhile, multinational enterprises are increasingly urged not to violate human rights, regardless of whether they operate far beyond the borders of their home states. However, the regulatory capacities of these corporations’ home states have not kept pace. Their judicial systems are often incapable of remedying business-related human rights abuse that occurs outside their frontiers. To canvass how states might complement courts, this thesis answers the UN Guiding Principles on Business and Human Rights’ call for effective state-based non-judicial grievance mechanisms.
To begin, it is explored why people whose human rights have been harmed due to extraterritorial business operations are often denied effective judicial remedy. In light of this, the thesis scrutinizes the requirements that a non-judicial grievance mechanism should satisfy to be effective. To this end, by starting from procedural guarantees of human rights treaties, the UN Guiding Principles’ effectiveness criteria are interpreted. Based on these findings, a grievance mechanism for Switzerland is ultimately conceived.
The current barriers to justice are found to be many and to range from cost and evidentiary problems to a problematic legal doctrine that regards affiliate companies as different legal entities. Effectiveness therefore involves that access to non-judicial mechanisms is not obstructed by the same obstacles. Moreover, people should be enabled and entrusted to invoke non-judicial mechanisms. This, in turn, requires that information about the availability of such mechanisms is distributed and awareness raised.
Regarding the grievance process itself, it is found that precise procedural rules should apply and equality be assured. A non-judicial grievance mechanism should comply with the human rights duties of the state providing it. Procedural outcomes, in turn, should be determined by corporate human rights responsibilities. Furthermore, a state-based non-judicial grievance mechanism should be transparent and a source of comprehensive and expedient information to enable external bodies to improve corporate human rights impact; though, legitimate confidentiality interests should be preserved.
These theoretical findings are applied to conceive an effective grievance mechanism that should, above all, avouch the balanced satisfaction of three imperatives. First, the mechanism must be apt to come to grips with the issues currently obstructing access to judicial remedies; second, it must be based on and compatible with human rights; and third, it must not be perceived as a mere “anti-business” initiative. Considering this, a “carrot-and-stick”-approach inciting cooperation while allowing for an objective third party human rights assessment is submitted. It is argued that both victims of corporate-related human rights abuse and transnational corporations could benefit from cooperation. In the case that cooperation is refused, an authoritative process including coercive measures is suggested as a fallback procedure.

This paper presents a new approach for the secure and robust copyright protection of digital images. A system for generating digital watermarks and for trading watermarked images is described. The system is based on a new watermarking technique, which is robust against image transformation techniques such as compression, rotation, translation, scaling and cropping. It uses modulation of the magnitude components in Fourier space to embed a watermark and an accompanying template and, during watermark extraction, reads a template in the log polar transform of the frequency domain. The template is used for analyzing scaling and rotation suffered by the watermarked stego-image. The detection of the watermarks is also possible without any need for the original cover-image. In addition, the system applies asymmetric cryptographic protocols for different purposes, namely embedding/detecting the watermark and transferring watermarked data. The public key technique is applied for the construction of a one-way watermark embedding and the verification function to identify and prove the uniqueness of the watermark. Legal dispute resolution is supported for the multiple watermarking of a digital image without revealing the confidential keying information.

This entry in the Max Planck Encyclopedia of International Procedural Law, titled Panel: Dispute Settlement System of the World Trade Organization (WTO), comprehensively covers all aspects of dispute settlement before WTO panels, as well as panel proceedings within the overall WTO dispute settlement system. This includes informal and formal consultations; the establishment and composition of panels; the sequence of proceedings; access for non-disputing parties; and the role of of the WTO Secretariat. The article also covers various elements of the panel process, including terms of reference, the standard of review, the applicable rules of interpretation, questions of evidence, the use of experts, the confidentiality of panel proceedings, panel expenses, and impartiality. It finally touches on how developing countries participate in the panel process and what the consequences are of the WTO's Appellate Body suspension.

After its "revitalisation" after the Cultural Revolution, China's people's mediation system declined throughout the 1990s. However, a "second revitalisation" that began in 2002 has quite successfully reversed this trend. This article discusses this reform effort in four parts. Part I explores the reasons for the 1990s decline of people's mediation in urban China and the government's interest in strengthening this institution. Policy reforms at the national level - particularly the issuance of the "Three Documents" - are analysed in Part II. Part III describes the basic unit in the urban people's mediation web, the community PMC, and then details the web's "vertical expansion" and "horizontal expansion," including new forms of cooperation with the police and courts. The paper concludes with Part IV, which discusses the new "legalised" nature of urban people's mediation and evaluates the significance of the reforms described above.

Little previous research has examined why dismissed workers view their discharge as unjust and how they respond to third-party dispute resolution interventions. This exploratory field study relied upon a justice framework to understand complainant motivations for filing unjust dismissal disputes and their reactions to a voluntary conciliation program. Analysis of archival and interview data suggested that procedural justice principles dominated both motivations for filing claims and reactions to third-party intervention. These findings were consistent with previous justice and labor relations research. Implications for future research, management practice, and third-party dispute resolution are discussed.

OHIO STATE JOURNAL ON DISPUTE RESOLUTION [Voi. 16:3 2001] and other "little guys," companies increasingly began to use form contracts to impose arbitration in these adhesive contexts on a far more frequent basis.4 This phenomenon should have raised the ...

The use of Alternative Dispute Resolution (ADR) techniques in construction have gained great momentum in the public sector during recent years in Hong Kong. The Hong Kong Government has initiated the inclusion of ADR methods as an integral part of the dispute resolution procedure in the standard forms of contracts for use in Government projects. However, the use of ADR in the private sector has not been apparent, probably due to lack of experience and knowledge. This paper discusses the philosophies behind ADR and reports on an evaluative study on the critical attributes of ADR techniques. Two evaluation methods, scale rating and percentage rating, were employed to establish attribute importance rankings through soliciting views from practitioners with ADR experience. The attributes were then grouped into factors as extracted from Factor Analysis. The rankings of the factors so obtained from the two evaluative methods match well. The study reveals that users of dispute resolution processes are pragmatic and consider obtaining benefits as the most critical factor affecting the use of ADR in the construction industry in Hong Kong. Such benefits include cost minimisation and relationship preservation. It is also suggested that if ADR is to sustain its growth in use, these processes must facilitate a speedy resolution.