FERC: Common Dispute Resolution Approaches

Legal Resources Alternative Dispute Resolution Continuum of Dispute Resolution Approaches

Common Dispute Resolution Approaches

a. Unassisted Negotiation	Main Page

What is it and when is it used? In many respects, negotiation is the fundamental form of dispute resolution. Negotiation is a process of discussion and give-and-take between two or more bargainers/disputants who seek to find a solution to a common problem. It has been described as a bartering and communication process and a psychological confrontation. How is it done? The bargaining can be a relatively cooperative process when both sides seek a solution that is mutually beneficial (a win-win solution or cooperative bargaining). It can also be confrontational when each side seeks to prevail over the other (win-lose or adversarial). The definition of the negotiation process and how the process occurs differ across cultures.
b. Alternative Dispute Resolution	Main Page
As noted in the Continuum above, assisted negotiation methods can be more or less evaluative, depending not only on the method chosen but also the needs of the participants and the neutral chosen. Generally, the least evaluative of the assisted negotiation processes are conciliation and facilitation, somewhat evaluative processes may be mediation and the Commission’s Settlement Judge Process, even more evaluative processes are the mini-trial and early neutral evaluation, and the most evaluative process is arbitration. However, these distinctions can blur in a particular process. Conciliation What is it? Conciliation involves building a positive relationship between the parties to a dispute. A third party or conciliator (who may not be totally neutral to the interests of the parties) may be used by the parties to help build such relationships. How is it done? A conciliator may assist parties by helping to establish communication, clarifying misperceptions, dealing with strong emotions, and building the trust necessary for cooperative problem-solving. Conciliators may: provide for a neutral meeting place, carry initial messages between/among the parties, provide reality testing regarding perceptions or misperceptions, and affirm the parties' abilities to work together. When is it used? Because a general objective of conciliation is often to promote openness by the parties (to take the risk to begin negotiations), this method allows parties to begin dialogues, get to know each other better, build positive perceptions, and enhance trust. The conciliation method is often used in conjunction with other methods such as facilitation or mediation. Facilitation What is it? Facilitation involves the use of techniques to improve the flow of information in a meeting between parties to a dispute. The techniques may also be applied to a decision-making meeting where a specific outcome is desired (e.g., resolution of a conflict or dispute). The term "facilitator" is often used interchangeably with the term "mediator," but a facilitator does not typically become as involved in the substantive issues as does a mediator. The facilitator focuses more on the process involved in resolving a matter. In sum, the goal of a facilitator is to help the participants achieve the objectives of the meeting. How is it done? The facilitator generally works with all of the participants at once and provides procedural directions for the group to move efficiently through the problem-solving steps of the meeting and arrive at the jointly agreed-upon goal. The facilitator may be a member of one of the parties to the dispute or may be an external consultant. Facilitators focus on procedural assistance and may remain impartial to the topics or issues under discussion. When is it used? Use of facilitation is most appropriate when: The intensity of the parties' emotions about the issues inhibits good communication The parties or issues are not extremely polarized The parties have enough trust in each other that they can work together to develop a mutually-acceptable solution, or The parties are in a common predicament and they need or will benefit from a jointly-acceptable outcome. Generally, in FERC-related disputes, facilitators may be representatives from the Dispute Resolution Service (DRS) or another office. Mediation What is it? Mediation is the intervention into a dispute or negotiation of an acceptable, impartial and neutral third party who has no decision-making authority. The objective of the third-party neutral is to assist the parties in voluntarily reaching an acceptable resolution of the issues in dispute. The mediation process is voluntary and does not eliminate other dispute resolution options. Also, a mediation process is confidential, whether or not it results in settlement. The third-party neutral in a FERC mediation can include a mediator from the private sector, a Commission administrative law judge, or a mediator from the Commission's Dispute Resolution Service (DRS). How is it done? A mediator, like a facilitator, makes procedural suggestions regarding how parties can reach agreement. A mediator may also suggest some substantive options as a means of encouraging the parties to expand the range of possible resolutions under consideration. A mediator can work with the parties individually in caucuses, or with all parties present, to develop interests and explore options that address their interests. Mediators differ in their degree of directiveness. Many mediators focus on business relationships in the process of dispute resolution. Such relationships will often continue in the future and creative solutions may reduce or eliminate tension so that constructive and improved relationships develop. The key is that the parties work with the mediator to develop a process that meets their needs, and determine what role they want the mediator to play. When is it used? Professional mediators are trained in developing ways to involve key stakeholders to the dispute. A skilled mediator should be able to work in dual-party to multi-party contexts in which the mediator has to be both an excellent facilitator and an organizational manager. In the multi-party context, the parties need a neutral who can assist a diverse group of interested parties in solving a complex set of issues in an organized way. Settlement Judge Process What is it? Settlement judge proceedings at the Commission are conducted under Rule 603 of the Commission's regulations. The Commission's settlement judges are administrative law judges who are trained in alternative dispute resolution techniques and are authorized to consult with the parties and assist them in resolving a dispute. How is it done? Settlement judge proceedings require the participation of the parties, and the judge controls the process. The settlement judge will convene and preside over conferences and settlement negotiations between the participants and assess the practicalities of a potential settlement. A settlement judge can employ any one of the many alternative dispute resolution applications, but generally uses a mediation-type approach. However, the judge is typically evaluative when addressing the issues. To encourage a free flow of information, the settlement judge is prohibited from discussing the case with a decision-maker or the Commission's advisory staff. When is it used? The parties or the presiding judge assigned to a hearing may request, or the Commission may direct, the appointment of a settlement judge. Participants may request that the Chief Judge assign a particular settlement judge to a proceeding. If available, that individual will be designated as the settlement judge. Early Neutral Evaluation What is it? Early neutral evaluation (ENE) aims to provide parties in dispute with an early frank evaluation by an objective observer or "evaluator" of the merits of a case. It is used when the parties disagree significantly about the value of their cases and are locked in positional bargaining. In positional bargaining, parties focus on the value or merit of their positions in which the resolution is based on who has the better position, as opposed to interest-based negotiation in which parties attempt to meet each others' interests. Like mediation, the ENE process is voluntary and does not eliminate other dispute resolution options. Also, the ENE process, whether or not it results in settlement, is confidential, and cannot be use in any subsequent proceedings without the approval of the parties. Finally, the evaluator is neutral -- i.e., not a decision-maker, litigator, or investigator. How is it done? During ENE, the objective Evaluator studies materials provided by the parties, performs independent research into relevant case law as necessary, considers presentations (written and/or oral), and clarifies positions and facts through questions. The depth of analysis, subject matter expertise and comprehensive legal evaluation provided by the Evaluator can vary according to the experience, time and effort that the Evaluator can offer the parties. In addition, the process need not be confined to the arguments raised by the parties. After gathering all the information needed, the Evaluator then offers an opinion as to the settlement value and the potential outcome of the case, including what the Commission staff may recommend. The evaluation made is not binding. These factors set ENE apart from other evaluative ADR methods, such as arbitration, and may make it useful in a variety of situations in which the parties need objective expertise. Moreover, while settlement is not the main goal of ENE, the parties may alter their negotiation approaches or explore other options for settlement. When is it used? ENE is particularly appropriate when the dispute involves technical or factual issues that lend themselves to expert evaluation, and when the top decision-makers of one or more of the parties could be better informed about the real strengths and weaknesses of their cases. ENE can enhance direct communication between the parties about their claims and supporting evidence and provide an assessment of the merits of the case by a neutral expert. In addition, it can provide a "reality check" for clients and lawyers and help to identify and clarify the central issues in dispute. Mini-trial There are two types of mini-trial: the "Executive mini-trial" and the "Judicial mini-trial." What is an Executive Mini-trial? An Executive mini-trial is actually not a trial. Instead, it involves a structured settlement process in which each side to a dispute presents abbreviated summaries of its cases to the major decision-makers for the parties who have authority to settle the dispute. The summaries contain explicit data about the legal basis and the merits of a case. How is it done? The process generally follows more relaxed rules of discovery and case presentation than might be found in a court or other formal proceeding and usually the parties agree on specific limited periods of time for presentations and arguments. A third party neutral may oversee a mini-trial. That individual is responsible for explaining and maintaining an orderly process of case presentations and may give an advisory opinion regarding a settlement range, if requested, rather than offer a specific solution for the parties to consider. The third party may also provide mediation services upon request. When is it used? The rationale behind an executive mini-trial is that if the decision-makers are fully informed as to the merits of their cases and that of the opposing parties, they will be better prepared to engage successfully in settlement discussions. What is a Judicial Mini-trial? A Judicial mini-trial is an abbreviated hearing that involves attorneys for all of the parties to the litigation. How is it done? Attorneys put on their clients' experts for a quick decision on the preliminary issue, by a Judge picked for that particular purpose. At the conclusion of the mini-trial, the judge renders a non-binding opinion. If the parties are unable to conclude a settlement, the case will proceed to trial in the normal manner. When is it used? The Judicial mini-trial can be helpful when the parties are unwilling to negotiate on the full range of issues because they are stuck on a preliminary issue that both sides think they can win. Fact-finding What is it? Fact-finding is a process of determining the relevant facts relevant to a controversy. How is it done and when is it used? Fact-finding can be performed by a neutral third party who is selected by the parties in advance to make either conclusive or advisory decisions. The parties may also select expert fact-finders as neutrals who give expert opinions that are either conclusive or non-binding on technical, scientific or legal questions. Advisory staff's use of technical conferences is comparable to an ADR fact-finding process. Arbitration What is it and how is it done? In arbitration, parties or their representatives present a dispute to an impartial individual or panel for issuance of a decision. The arbitration may be either non-binding (i.e., an advisory decision that the parties do not have to accept); or binding (i.e., non-appealable). Under the process, the parties may have input into the selection process, which gives them the ability to choose an individual or panel with some expertise and knowledge of the disputed issues. When is it used? Arbitration is appropriate when the parties want a third party to decide the outcome of their dispute but would like to avoid the formality, time, and expense of a trial and have more control over the decision-making process. A non-binding decision would be used to advise the parties of a possible outcome in a trial and does not prevent the parties from seeking a trial or other resolution of the dispute. In a binding arbitration, the parties generally cannot appeal the arbitrator's award, so it is a final determination. An exception is when the arbiter's decision must be reviewed by the Commission.
c. Adjudication	Main Page
Court What is it and how is it done? Court adjudication is a formal dispute resolution process in which parties present evidence to a judge or a jury who decides the outcome of the controversy. Formal rules dictate the presentation of evidence, and the decision may typically be appealed to higher panel or court. When is it used? Formal adjudication is what many in our culture believe is the only or best way to settle a dispute. In fact, it is appropriate when: There are legal or policy reasons for uniform treatment of the issues Outcomes of an ADR process would affect non-participants (all affected participants must be represented) One or more key parties are not committed to an ADR process A full record of the proceeding is important. Administrative What is it? An administrative hearing is a formal proceeding at an agency that orders a trial-type hearing to decide facts in dispute between parties. An administrative law judge at that agency oversees the hearing process and is responsible for conducting proceedings, interpreting the law, applying agency regulations, and carrying out the policies of the agency in the course of the adjudications. Although the judge is an employee of the agency, the judge's appointment is absolute to ensure an independent exercise of these functions. How is it done? During the administrative hearing, the administrative law judge will hear evidence (which is generally subject to formal rules) and make recommendations to the agency heads as to as to how the agency should proceed. The agency may follow, amend, or reject the judge's findings. The decision of the agency, once final, typically may be appealed to an appropriate court. When is it used? A hearing may be appropriate in the following situations: The dispute would/should establish a Commission precedent or define broad Commission policy. The Commission needs to apply uniform treatment that cannot be achieved through ADR. Case includes issues of fact. Is important that there be a full record of the proceeding. Outcomes of an ADR process would affect non-participants (all affected participants must be represented). One or more key parties is not committed to an ADR process.