April 14, 2020 A New Era for Dispute Resolution in a COVID-19 World

Businesses can survive by being reflective, while engaging in collaborative dialogue and proactive dispute management.

By Ranse Howell

“And this, too, shall pass away.” – Abraham Lincoln

There are several defining times in history, and we are currently living through one of them. However, history does have a habit of repeating itself, often with a new twist, and we should use this opportunity to learn from the challenges we are facing. The shutdown of almost all businesses, coupled with the directive to stay in our homes, has led to an unprecedented supply chain disruption. This pandemic has already had a greater impact on the world than almost any other crisis in history. Thus, it requires a different response. For professionals in the supply chain that are managing internal workflows and external relationships, it is important to think not only about what happens during this pandemic and stasis, but also how our actions will impact what follows.

Impact of an emancipated workforce

We will need to devise new systems and processes that are compatible with working remotely, which has been thrust on many of us as a result of social-distancing requirements. Many believe that they don’t have to conform to the old norms because new methods of engaging and interacting have been created. Employers will have to consider how to manage this emancipated workforce, which is currently operating, by necessity, under a flexible remote arrangement. The crisis will be over but will people want to return to the ‘business normal’ of the past, or instead look for a new normal, something that blends flexibility with the need to ensure environmental consciousness and sustainability, something that was only a hope and now because of the crisis has become a reality.

Mechanisms to prevent, manage and control disputes

When it is safe for all businesses to resume their operations, the challenge will be how to deal with the void that buyers, sellers and everyone else involved in a service or manufacturing business will encounter, as well as all of the unimaginable repercussions that this extended interruption will cause. Businesses will need a range of dispute resolution mechanisms. Alternative dispute resolution (ADR) providers offer a number of mechanisms that can meet this need, such as mediation (a third-party neutral assists the parties to come to an agreement, with the parties in control of the resolution) and arbitration (a neutral issues a binding decision). However, a broader, more expansive offering may be necessary, one that provides speed and certainty and that makes business sense. A range of dispute management mechanisms should be considered to fix broken or challenged supply chain relationships and build a strong buyer-supplier network and, where possible, find an integrative and workable solution for the long term survival of the business. However, will these dispute management mechanisms be appropriate for the future? That depends. The dispute management approach can be applied, however, the application needs to adapt to the (new) ‘normal’, thus equipping businesses with the ability to prevent, manage and resolve commercial conflict.

Businesses must listen to stakeholders and learn from their COVID-19 response to build a pathway forward.

Stakeholder dialogue

This unique period of business disruption allows us all to reflect and recognize that business may not return to normal once this crisis is over. Businesses will have worked in a different environment for an extended period of time, and individual expectations and connections will be different. It is therefore essential that organizations use these methods of connecting to integrate support and encourage dialogue between all stakeholders through facilitated negotiation (online and in person), where individuals can explore options while engaged in an agreed-upon process. Other mechanisms that should be considered are those that encourage dialogue and problem solving, such as proactive neutral intervention such as early stage mediation, a process that encourages individuals to seek resolution of their dispute before commencing proceedings and other streamlined (efficient and cost-effective) remedies, such as expedited arbitration. This process could take advantage of the certainty of the arbitral process, along with the benefits of cost-saving, speed and efficiency.

Listen and learn to build a pathway forward

Once this pandemic is over, businesses will need to begin generating income, which, done in isolation, might be difficult and might best be accomplished through collaboration. During other periods of economic uncertainty, such as the aftermath of 9/11 and the financial crisis of 2008–2009, supply chains were encouraged to be resilient through sharing resources and information. However, this period of global economic shutdown has caused uncertainty across all sectors. There are no guidelines for managing this crisis; however, lessons can be learned from the past. Leaders need to listen to those in their organization who speak on behalf of customers and employees. Everyone needs to understand the role that uncertainty will have on decision-making. It is essential to focus on the future, thus giving everyone within an organization a sense of optimism.

Business leaders will need to engage in a thorough “lessons learned” review of their responses to this crisis. They should ensure that there are systems in place to anticipate, manage and resolve conflicts as they arise, instead of ignoring them or following their usual courses of action. The best way to see this challenge is as an investment in the future of business to be able to learn and adapt.

Ranse Howell is a member of the senior management team and oversees international efforts at JAMS. He is an accomplished leader in cross-border alternative dispute resolution, with over a decade of experience in mediation, training, conflict management and business development. At JAMS, he supervises a global team with representatives in multiple markets across the United States as well as in China, Mexico and the United Kingdom, among other countries. He can be reached at rhowell@jamsadr.com.

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