Why dispute resolution is important

What is dispute resolution?

Dispute resolution refers to all processes that are used to address disputes. It includes all dispute resolution methods and approaches from early resolution through to formal tribunal or court processes.

Disputes can involve:

• individuals (eg, neighbours in dispute over a shared driveway)
• companies (eg, an employee in dispute with an employer)
• sometimes the government itself (eg, a company challenging a decision by a government agency).

In all these situations, the parties involved generally have a range of options for managing or resolving the dispute. They may try to:

• resolve it themselves (self-resolution)
• agree to use a third party to help them (eg, privately contract with a mediator)
• use a process provided by government (eg, a government mediation service, tribunal or ombudsman)
• use a process provided by the private sector (eg, an industry body).

In some circumstances, the formal court system may be an appropriate channel or a last recourse when other approaches have been unsuccessful.

Why dispute resolution is important

Disputes are damaging, expensive, and time consuming. They affect individuals, communities, organisations, government, and the economy. Preventing disputes, and resolving disputes earlier and more effectively, benefits Aotearoa New Zealand and the economy.

The cost of disputes

Unresolved conflict and substandard dispute resolution is socially and financially costly. The direct cost of employment disputes alone has been indicatively estimated at $440 million per annum. The full costs of all types of disputes to government, parties and society are considerable, and are a significant impediment to economic prosperity.

Disputes can have negative cumulative effects upon individuals and their whānau. For example, an employment dispute that results in a loss of income can contribute to a downward spiral in other areas of life. This means it is important to address disputes early and effectively. 

The way in which disputes are resolved and the nature of the outcomes can also affect public confidence in government services and perceptions of quality and fairness.

The functions of government

Government performs a number of functions in the resolution of disputes. It:

• provides ways for people to raise their issues
• sets the rules
• collects information about dispute resolution approaches and outcomes
• provides for complaints and dispute resolution services. Many of these services are delivered privately within industries, sectors, and communities.

Dispute resolution processes

Our ways of dealing with disputes in Aotearoa New Zealand have changed in recent decades in response to a range of social and other changes. There has been a search for more cost-effective and quicker alternatives to traditional court-based resolution, particularly for civil disputes.

These alternative approaches have responded to the need for:

• more flexibility and less formality
• privacy and confidentiality
• more specialised and innovative solutions
• greater participant involvement and empowerment
• early resolution
• greater timeliness

They can often achieve faster outcomes at a lower cost. Parties are also more likely to be satisfied with the result and compliance rates are likely to be higher, so less enforcement should be required.

We need to be consistent with the usage. 

The role of a neutral third party

The types of dispute resolution sit along a spectrum of formality and empowerment, as shown in the image below.

A distinction between these processes is the role played by a neutral third party. An outcome may be agreed between the parties (a ‘consensual’ process), with a neutral third party either facilitating the process or providing expert advice or recommendations in an evaluative way.

Alternatively, parties may require a decision to be made by the third party that is legally enforceable (a ‘determinative’ process). 

See Glossary of terms.

Dispute resolution in New Zealand

Alternative dispute resolution services play an important role in Aotearoa New Zealand. One major aim is to achieve better coordination and greater consistency in dispute resolution approaches.

There are at least 55 different dispute resolution schemes or procedures in Aotearoa New Zealand. These cover areas as diverse as consumer protection, employment, property and building and human rights.

There are also public accountability agencies that are partly or wholly focused on complaints to or about government, for example the Ombudsman whose primary role is to investigate complaints against government agencies.

Dispute resolution practitioners

There are 2 professional membership associations specifically for dispute resolution practitioners:

• the Resolution Institute (RI, formerly LEADR)(external link)
• the Arbitrators’ and Mediators’ Institute of New Zealand (AMINZ)(external link)

Some practitioners who work in family law are also members of the New Zealand Law Society (NZLS).

There are a few large private dispute resolution providers, but most are sole practitioners.