What is Dispute Management?

Dispute management refers to a conflict arising from difference in opinions between two or more parties, disparity between what was expected/promised and what was delivered, from greed, jealousy, anger, urge to control or dominate etc.

Disputes could be between two or more individuals, organizations, states and nations. Reasons for a dispute could be numerous but having a dispute management/resolution process in place saves time, money, reputation and the continuity of activities without hindrance. Let us examine the concept of dispute/resolution management from an organization’s point of view.

An organization is deemed to be a going concern, in that it has all the necessary resources needed to continue to run. If one were to look at the various activities an organization performs on a day-to-day basis, there are a lot of areas disputes could creep in.

Every able organization has its own internal Dispute Management team, whose primary objective, among others, is to identify department-specific disputes and devise a process to deal with such disputes in an effective manner and also to educate employees of the dispute management processes.

Dispute management process flow

Designing a dispute management process for an organization has to take into account all the stakeholders viz., nature of work of the organization, customers, employees, shareholders, and the regulator’s guidelines issued from time to time.

A dispute management process differs from one organization to the other basing on the factors listed above.

Let us look at a dispute management process for an Insurance company bound by the regulations of its regulator, IRDAI (Insurance Regulatory and Development Authority of India).

The whole dispute management process revolves around:

A customer with a specific grievance may approach the policy issuing office and register his/her grievance. The office incharge will be the one to respond to the submitted grievance. It is the incharge’s duty to address the grievance by considering all the documentary evidence submitted and the documents available with the office towards closure of the grievance.

If addressing the grievance is beyond the policy issuing office incharge’s influence, the incharge should refer it to his Controlling Officer at the Divisional Office level. The Divisional Incharge will commission a Divisional Customer Redressal committee comprising of himself and two other officers to address the grievance.

However, if the committee fails to address the grievance due to various reasons, the committee shall refer the grievance to the Regional Customer Grievance Redressal committee at the regional office.

If the closure provided even at the regional level is not satisfactory, the customer can approach the Insurance Ombudsman (contact details of the ombudsman will be provided by the insurance company). The insurance company provides all the information it has with reference to the grievance to help the Ombudsman provide a solution.

If the customer isn’t satisfied with the judgement of the Ombudsman, the customer can proceed to take up the matter to the Grievance Redressal Cell at the IRDAI.

The customer may, at any point in time, approach the Consumer Courts to ask for their adjudication.

Dispute management in accounts receivable:

Accounts receivable of an organization refers to the money the company is owed by the parties who purchased goods or services from the organization.

Needless to say that the organization’s financial health depends on the timely manner of cash inflow. There are a vast number of reasons for the purchasing parties refusing to pay to the organization. Below listed are the common ones:

  • Pricing dispute: Difference in payment charged to that of what was agreed upon by the parties involved.
  • Quality Dispute: The purchaser refusing to pay citing the poor quality of the goods or service availed.
  • Administrative Dispute: This kind of dispute arises when the documents relating to the contract between the purchaser and the buyer are either missing or incomplete thus affecting the contract.
  • Unaccounted Goods Dispute: Disputes arising due to billing for goods or services which weren’t ordered or availed.
  • Disputes with regard to billing errors: One or more items ordered being billed twice erroneously.

Some of the disputes are petty while some pose a serious challenge to the Dispute Management team of the organization.

Many of these disputes could be avoided by training the employees involved with cataloguing, taking orders, generating invoices, loading and delivery team etc. Developing stricter job duty protocols for each of the employees can effectively thwart the petty reasons leading to disputes.

Dispute resolution process steps

Devising a strategy to tackle a dispute depends on the line of business of the organization and also the dispute at hand.

Step 1: Call a meeting with everyone involved in the conflict. Make sure you include everyone involved. If you leave someone, conflicts cannot be resolved effectively and permanently.

Step 2: Establish discussion rules.

Step 3: Discuss the problem clearly in terms of requirements. Each party to a conflict must be able to fully define the needs of the other party. This takes time and patience. Oftentimes, the key to resolving conflict lies in the fact that people realize what they really need and not just what they want.

Step 4: Develop possible solutions that meet the needs of both or all parties to the conflict. You may need to get the ball rolling by making your own suggestions.

But once the staff has spoken, let them suggest their ideas. Show that you are open to suggestions from employees by not evaluating ideas right away.

Step 5: Choose a mutually beneficial solution from the ones offered. Remember that the best solution – the permanent solution – will best meet the needs of each country. Don’t try to force a solution, but instruct the employees involved to make the best choices themselves.

Step 6: Develop an action plan. Determine who should do what, when and how conflict resolution should be implemented. This is an important step. Without them, conflict could easily flare up again.

Step 7: Carry out the plan and see the results.

Step 8: Assess the conflict resolution process in general and the resolution of this conflict in particular. Did the process produce effective and positive results? Are employees satisfied with the decision? Will your efforts help eliminate or at least minimize this type of conflict in the future?

How to resolve disputes

The most common methods of dispute resolution include:

  • Lawsuits
  • Arbitration
  • Collaborative Law
  • Mediation
  • Conciliation
  • Negotiation
  • Facilitation
  • Avoidance

Although Dispute management is not an income generating source for any organisation, It does help an organisation from bleeding its resources.

Hence , It is not only an important for an organization to invest money and resources in developing an dispute management team, but also involving them in decision making.