IT association offers guide to avoiding lawsuits

Keeping businesses from resorting to litigation and encouraging them instead to apply alternative dispute resolution strategies can help save time and money, according to John Reid, president of Ottawa-based Canadian Advanced Technology Alliance (CATA).

“If you deflect resources from the core mission of your business, it really seriously affects the prospects for success,” said Reid.

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How to stay on the right side of the law

CATA recently made a Conflict Management Tool Kit for organizations in the IT sector, which includes methods that warring parties can apply to help resolve conflicts before calling on their legal departments to intervene. The goal is to resolve disputes “fast and at the lowest level possible” before they spiral out of control, said Paul LaBarge, co-chair and project lead with Ottawa-based Canadian Advanced Technology Alliance (CATA).

LaBarge has observed that automatically referring to the legal department when faced with disputes often means jumping “about four levels of possible settlement.”

One method in the Tool Kit suggests a reference scale for contracts, which would stipulate who would handle issues. In the event that two individuals disagree, the approach will help depersonalize the issue by having more senior employees deal with the matter because, according to LaBarge, “minions don’t necessarily understand the value of the relationship.”

Another method is to include in the contract a process wherein an independent expert will be brought in, agreed upon and paid for by both parties, to mediate. A mini trial involving a senior executive from each company will present their best case to the third-party mediator. “You say, forget rules of evidence, and give me the best case, and you’ve got an hour to do it,” said LaBarge. The approach allows each side to hear the other’s story without the usual filter.

The Tool Kit also provides an appendix of clauses for inclusion in contracts that encourage alternative dispute resolution instead of litigation should it be required down the road. “It’s important to assume there will be difficulties and problems,” Reid said. “You make [alternative dispute resolution] very clear and transparent right up front.”

LaBarge, who is also a partner with Kanata, Ont.-based law firm LaBarge Weinstein LLP, recently completed his Masters degree in alternative dispute resolution. The methods included in the Tool Kit are tried and true approaches he observed during his studies that he has now compiled.

Besides basing the Tool Kit on observed practices, the suggestions are based on a survey, conducted by CATA, of 90 companies to understand the cost of litigation to the industry. Results revealed that legal disputes have exceeded $17 million. “And that’s only the tip of the iceberg,” said Reid, “because when you get engaged in litigation and conflict, it’s very hard to preserve good will and good relations moving forward.”

The survey also confirmed to CATA that litigation is indeed an industry concern, he added.

Businesses seeking advice around alternative conflict resolution will be able to visit an online forum by CATA where experts will offer guidance and insight into different strategies and tactics. The Tool Kit, also in its final stages, will be available on the forum.

Reid said the Tool Kit can apply to outsourcing deals gone awry where a company might express discontent with a service provider. Outsourcing problems, he said, is a common area of conflict among surveyed companies.

“We’re dealing with general principles that would apply to any risk exposure a company has with outsourcing, suppliers, customers, employees.”

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