Resolving Disputes Through Interests, Rights, and Power Part Three

Determining Dispute Resolution Costs

The four conditions are interrelated. Unhappiness with an outcome can lead to more stress in the relationship, which leads to the reappearance of disagreements which increases transaction costs.

Since these costs increase and decrease in tandem they are referred to in sum as the costs of disputing. When a resolution procedure is referred to as high cost or low cost, it means not just the transaction costs but also the strain on the relationship, unhappiness with the outcome and continued quarreling.

Sometimes reducing one cost translates into increasing another.

Interests versus Rights or Power

An interest based resolution can more effectively settle a dispute then a rights or power based resolution. Often the real issue is not the one under dispute but rather the concerns that led to the dispute. Focusing on who is right or more powerful does nothing to allay those concerns.

An interest based methodology can uncover hidden problems and also help the disputants to prioritize which needs and concerns are of greater or lesser priority. This allows for tradeoffs of issues of lesser concern for issues of greater concerns allowing both disputants to gain. Joint gains can then be realized when disputants focus on and tradeoff interests.

Focusing on who is right or more powerful leaves at least one loser who usually wants revenge or a just result and refuses to give up. This increases transaction costs and causes a more adversarial future relationship. Higher levels of mutual satisfaction tend to be realized through the reconciliation of interests.

If the disputants are happy with the outcome, their relationship benefits and the dispute is less likely to recur. Reconciling interests does take time, however this cost fades in comparison to the transaction costs of such rights and power contests as trials, hostile corporate takeovers and wars.

Rights versus Power

Determinations of who is right or more powerful can strain a relationship, although the application of a perceived fair standard is easier to swallow than being forced to give in. Power resolutions usually cost more in resources consumed and opportunities lost than rights resolution, e.g. strikes cost more than arbitration and violence costs more than litigation.

The higher transaction costs of power contests flow not only from the effort expended and resources consumed, but also from the destruction of the other side's resources. In fact, destroying the enemy may be the whole point. This can lead to new injuries, new disputes as well as anger, distrust, resentment and desires for revenge.

Putting It Into Practice

While interest based resolutions are often preferable because they have lower costs, greater satisfaction, less strain and less recurrence, they are not always to resolution method of choice. Sometimes interest based methods can't be used unless rights or power based approaches are initially used to bring a reluctant party to the negotiation table.

For example, it was clear that the Serbs would not negotiate under the then current conditions of that war. They were winning, they would only lose if they started negotiating. Something had to happen to change their perception. Eventually it did.

President Clinton sent in troops and the war alternative ceased to be the most attractive. The Serbs eventually agreed to negotiate. Or, your 3 year old is drawing on the wall having a great time. In order to get her to stop something has to happen to make drawing on the wall a less attractive activity.

In other disputes the parties fail to reach resolution on the basis of interests because the perceptions of who is right or more powerful are so at odds that they can't establish a bargaining range. A rights process may be needed to establish the rights boundary in which a negotiated resolution can be found.

Divorce mediation often gets stuck when the parties are unaware of court mandated formulas for child support or alimony. Once they aware of the minimum requirements they can often proceed to resolving the issue. Sometimes nonbinding arbitration or evaluative mediation is needed to clarify their rights or the merits of their arguments, before they can proceed to resolution.

Uncertainty about the relative power of each can make resolution difficult. Labor relations practitioners know that a highly conflicted management labor management relationship can often calm down after a lengthy strike.

The strike reduces the uncertainties about each side's power that had previously made them unwilling to concede. And, the long term benefits may justify the high costs in the end.

Sometimes interests are so opposed that agreement is not possible. An abortion clinic and a right to life group can never agree on a resolution which permits the clinic to continue operating. Rights, like litigation, or power, demonstrations or legislative battles are the only means available for resolution.

For the rest of this article, please go to

Interests, Rights, and Power, Part One

Interests, Rights, and Power, Part Two

To learn more, you might want to read,

For more information about Alternative Dispute Resolution, click on any of the links below.

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