External Private Dispute Resolution Initiatives
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External private dispute resolution initiatives operate outside the organization against which the complaint was made, and outside the courts, although there may be legal implications that result from resolving disputes this way.Examples include third-party mediation, arbitration, tribunals, councils and external ombudsmen.
Commonly Used External Dispute Resolution Techniques
Mediation is a process in which disputing parties, with the help of a mediator (a neutral third party), identify the disputed issues, develop options, consider alternatives and try to reach an agreement. The mediator facilitates the process, but does not advise parties, nor impose an outcome.
Arbitration is a process in which disputing parties present arguments and evidence to a neutral arbitrator, who then decides the matter. Generally, arbitration decisions are binding on the parties.
Private tribunals or councils are non-legislated adjudicative bodies usually consisting of more than one individual with special knowledge of the area. The members of the tribunal or council hear arguments and evidence from both parties in a dispute according to pre-determined rules and processes, and then make a decision that may be binding on at least one of the parties.
While mediation, arbitration and tribunals are processes in which the quality and quantity of information available for decision making depends almost exclusively on what the parties provide, the same is not true of processes involving private external ombudsmen. An ombudsman has the power to investigate complaints on behalf of individuals (and thus to collect information in addition to what the parties may have) and to make recommendations. External ombudsmen usually operate at a sectoral level and tend to be used after internal processes (including an internal company ombudsman) have been tried and found unsatisfactory by one party.
Examples of External Dispute Resolution Initiatives
The Canadian Motor Vehicle Arbitration Plan (CAMVAP) is a non-profit corporation with a board of directors including representatives of provincial and territorial governments, customer organizations and the automobile industry. CAMVAP is funded by automobile manufacturers, with fees based on market share and past CAMVAP case performance. CAMVAP arbitrates disputes that customers have been unable to resolve directly with dealers. A customer completes a CAMVAP claim form, and the manufacturer must reply within 10 days. The customer is then given a choice of three arbitrators who come from a variety of backgrounds but are not automobile experts. The customer and dealer must agree to accept the decision of the arbitrator. More than 60 percent of the arbitrators’ rulings to date have been in the customer’s favour.
In 1988, the Canadian Cable Television Association established the Cable Television Standards Foundation, an arm’s length body of the Association, although funded by industry. The Foundation appoints the Cable Television Standards Council, which hears customer complaints that were not resolved with individual cable companies. The Council has three members: one with judicial or quasi-judicial experience, one who is an industry representative, and one who is a customer or public interest representative. The Council’s decisions are binding on cable companies, although customers can appeal to the Canadian Radio-television and Telecommunications Commission (CRTC). A company that refuses to comply with a Council decision may be compelled to resign from the Foundation, and thereafter be subject to direct CRTC regulation. Customers bear no costs for complaints handling or adjudication. Between September 1992 and August 31, 2001, the cable television industry received more than 23 000 complaints. Over the entire history of the Council, there have been only 15 Council adjudications, none of which the CRTC overturned.
The Canadian Banking Ombudsman (CBO) is available to customers once they have tried to resolve their complaint through their bank’s internal complaints-handling process and ombudsman. The CBO receives written submissions from parties, investigates and then, when appropriate, makes non-binding recommendations to the banks. To date, the banks have always complied with CBO recommendations. The CBO is required to publicly report any refusal to comply. The CBO is structured as a non-profit corporation, with a majority of its directors being independent of the banks. Participating banks fund the CBO based on market share. There is no cost to the customer who brings the complaint.
Characteristics of Effective Internal Complaints-handling and External Dispute Resolution Initiatives
Internal complaints-handling and external dispute resolution initiatives are distinct approaches usually designed to operate sequentially (i.e. internal complaints-handling techniques are exhausted before trying external approaches).Nevertheless, they share many characteristics, and successful programs frequently have similar attributes.
- The initiative is well publicized through retail outlets, and in advertisements, pamphlets and literature.
- Employees are trained in handling complaints and resolving disputes, and are courteous with customers, good listeners and imaginative problem solvers.
- The process is adequately funded and the appropriate logistical arrangements are in place to make it work.
- Regular review and monitoring take place to ensure that the program works and that continuous improvement occurs.
- It is easy for customers to use the program through toll-free numbers, fax, mail or e-mail.
- The process is free for customers.
- The response is speedy.
- There is continuous communication with customers throughout the process to keep them up to date.
- There are time limits for each stage of the process and these are made known to complaining customers.
For external dispute resolution processes, there are institutional mechanisms, such as an independent board and a non-profit structure, in place so that the independence and neutrality of the redress process is ensured, and seen to be ensured.
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- Internal Complaints Handling Initiatives
- External Private Dispute Resolution Initiatives
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