The Transition From Dispute Resolution to Conflict Management: What Do We Mean by “Conflict Manager” and Why It Should Become an In-house Fixture

Among the many useful recommendations in the guide, the ICC encourages a change in perspective when it comes to conflicts and the ways to resolve them. It recommends that businesses shift their viewpoint from “dispute resolution” to the broader concept of “conflict management”.

The guide sets out a number of practical steps to help implement this shift:

• Assess the whole range of alternative dispute resolution (“ADR”) mechanisms, among others mediation, disputes boards and arbitration, and view them as commercial tools that support a successful business administration.
• Identify potential conflicts before they emerge and address them pre-emptively before they become full-blown disputes.
• When deciding what ADR mechanism to use, assess how much control the company wants over the outcome. For example, more control in a mediation, but significantly less control in an arbitration.
• Create an internal structure that manages conflicts in a proactive way. For example, through the development and implementation of policies and processes to identify, and potentially avoid, emerging disputes.

As part of this internal structure, the ICC suggests that businesses should create an “ADR Champion”, an in-house role focused on the development and deployment of the proactive dispute tools and ADR services that are available. This “ADR Champion” or “conflict manager” would act as an intermediary between the operational teams, company management, in-house legal department and external legal advisors. As part of their role, they would carry out an early risk assessment to identify the risks of commencing formal dispute resolution proceedings and how those risks might be mitigated or eliminated. This assessment would include considerations such as:

• The strengths and weaknesses of both parties’ legal arguments.
• The impact of the dispute on the wider commercial strategy of the company.
• The financial impact of the dispute.
• Any risks associated with diverting internal resources that could otherwise be employed in productive company business, as well as the indirect costs resulting from other work being derailed as a result of employees’ time being spent on a dispute.
• The potential harm to a continuing or future business relationship.
• The regional or global reputational impact on the company’s other business partners, relevant regulatory authorities, shareholders or other stakeholders.
• Whether there is an interest in setting a precedent.

Within these considerations, there are some quantifiable elements and others that, while clearly having an impact, are harder to quantify — making it all the more necessary that this comprehensive assessment of the dispute be carried out by an expert in conflict management.

Will the “conflict manager” role become an in-house fixture? The emergence and development of this role might evolve in a similar way to that of compliance officers. Internal compliance tasks have evolved over the years. Having started as a quasi-legal function carried out by the legal team, compliance and the role of compliance officers have evolved to become essential players in identifying, calculating and mitigating risks.

Disputes are a contingent reality for companies. The key to good management is to combine a proactive approach — one that learns from the past to assess the risks and early warning signs — with a practical reactive outlook focused on obtaining a favourable outcome. This objective approach to disputes brings greater pragmatism and efficiency to their resolution, minimising losses and increasing value for the organisation. The figure of “conflict manager” or “ADR Champion” might well be the key to achieve these goals.