Tool-Kit Promises to Prevent High Cost of Business Litigation
June 19, 2008

Ottawa, June 19, 2008… According to a recent Survey conducted by CATAAlliance on the litigation experiences of 90 companies, the approximate cost in legal fees alone for managing their disputes exceeded $17 million. Out of this group of 90 companies, 67% had more than one law suit in the last three years.

Survey Highlights, also watch CATAnet TV
http://www.youtube.com/watch?v=fvM-nX2t2r4

  • Fifty-six percent of the respondents believed that the law suits had a moderate to substantial impact on their business due to the time spent internally in managing litigation. Only two per cent felt that litigation had no impact on their business.

  • In over 80% of the cases, the dispute resulted in a termination of the business relationship.

  • Mediation or some other alternative, such as arbitration, was used to settle the disputes in approximately 49% of the cases. The bulk of the cases resolved in this way were referred to mediation.

  • Over 90% of the participants indicated an interest in a structure that would allow them to resolve disputes in the early stages before it spiraled into litigation.

  • Similarly, 90% indicated an interest in having a defined set of contract terms for inclusion in agreements to support alternative dispute resolution options to avoid or limit litigation.

Conflict Management Tool Kit

According to Paul Labarge, CATA Co Chair, and project lead, "Current business structures are based upon an adversarial approach to conflict and tend to result in programmed behavior. In a commercial context, the sequence of a dispute is boringly predictable. Demand is followed by a negotiation period which is then followed by a statement of claim, a statement of defence, mandatory mediation, discovery, pre-trial, a trial and then appeals as appropriate. "

He added, "What initially could have started out as a small issue, mushrooms into a broadly based dispute as the parties jockey for position by creating issues which can be used as bargaining chips during the process. Most business people have been educated in the use of accounting tools, technologies and analytical tools, but few about the use of sophisticated methods for dealing with conflict."

CATAAlliance is launching a Conflict Management Tool Kit to help reduce litigation costs to the industry. It includes a handbook that outlines different methods for alternative dispute resolution and also provides as an appendix a series of clauses for inclusion in contracts. CATA, as well, is committed to creating a best practices forum with appropriate expertise in order to assist people in the use of these techniques for dispute resolution and in order to access these alternative methods.

Executives interested in participating in or who have guidance to offer on ADR should contact jreid@cata.ca with ADR in the Header.