ADR - Research and Analysis Report

RFP No.10026524
April 30, 2013

Introduction

The present report seeks to answer questions posed by the Office of the Procurement Ombudsman (OPO) in relation to the use of alternative dispute resolution (ADR) in the federal government's procurement practices. In particular, this report looks to address external and OPO's concerns as outlined in the Formative Evaluation conducted by Ference Weicker & Company in 2012, which evaluation recommended that additional analysis be undertaken to increase the use of ADR processes, such as making it mandatory for government departments once ADR has been requested by a supplier of goods and services. This report is thus part of an action plan developed by the OPO to address the recommendations of the Formative Evaluation and increase awareness of the ADR processes.

I. Is mandatory ADR - and OPO ADR services should these be made mandatory – consistent with the principles of ADR?

Principles of ADR

Alternative dispute resolution offers parties in a dispute the option of attempting to settle their differences by means other than traditional litigation, which remains a cumbersome and expensive process in Canada. ADR processes like negotiation, facilitation, mediation and arbitration are therefore being adopted by disputants with increasing frequency as effective alternatives to litigation. This is particularly the case in business disputes, where parties are concerned with keeping the costs and time spent on the matter as low as possible, where preserving relationships between parties is a crucial factor in ensuring the success of a business, and where privacy of the dispute is of the outmost importance to maintain the goodwill of a business.^{Footnote 1}  As such, courts should be regarded as a last resort especially when dealing with disputes involving small amounts, as is the case with most of the OPO cases to date.  In addition, where permitted by governing legislative and regulatory frameworks, the implementation of a mandatory or a strong ADR based system - perhaps one mirrored on the British "Dispute Resolution Commitment" discussed below - should be given serious consideration. Given the scope of the present paper, only the techniques of facilitation, mediation and arbitration will be discussed below.

Facilitation

Facilitation involves the intervention in the dispute by a third party neutral, whose job it is to facilitate communication between the parties. As such, the facilitator does not usually deal with substantive issues, rather he/she facilitates communication by eliciting party views and by clarifying issues. Facilitation is often the first step of dispute resolution and its effectiveness depends on how early on parties engage in it. The advantages and disadvantages associated with the technique of facilitation are very similar to those discussed in relation to mediation in the following section.^{Footnote 2} It is crucial that, in this first stage of the ADR processes, there is confidence in the impartiality and bona fides of the persons involved in the facilitation process and that any actual or perceived agenda to drag out the process in order to frustrate one or both of the parties is eliminated from the outset.

Mediation

Mediation has often been described as involving introduction of a third party neutral to assist the parties. The mediator has no decision-making authority. The role of a mediator is to facilitate communication between the parties by helping them move away from stated positions toward common interests. Unlike an arbitrator or a judge, a mediator has no power to impose an outcome; therefore, it is only when parties enter into a settlement agreement that they are bound by the outcome of the mediation. The goal of mediation is for parties to voluntarily and consensually reach their own mutually acceptable solutions.^{Footnote 3}

There are many advantages associated with the mediation process. First, if compared to arbitration or traditional litigation, mediation has proven to reduce the monetary costs associated with dispute resolution. Second, mediation can have a very positive impact on the amount of time required to bring the dispute to a resolution. Third, much like arbitration, mediation is generally a confidential process. In the case of closed mediations, for example, anything said by the parties during the mediation is considered confidential and will not be brought up in court. The process is therefore "without prejudice" and the mediator cannot be called upon to give evidence in any subsequent action. Fourth, resolutions agreed upon by parties in a mediated dispute have proven to be more durable than the outcomes imposed by a court or an arbitrator. Lastly, mediation can help preserve the working relationship between the parties as disputants are encouraged to craft their own resolution of the dispute based on common interests.^{Footnote 4}

Despite the many advantages to mediation, it is also important to keep in mind that mediation may not prove as beneficial in circumstances where there is bad faith or where there is a significant imbalance of power between the parties. In addition, mediation may not be the appropriate venue where, in a contractual or damage claim a party is insolvent, the breach of a legal obligation is so damaging that an immediate resolution is necessary, or where there have been repeated similar claims and the complainant wishes the court precedent to be used as a future deterrent. Perhaps most importantly, bringing the parties to the mediation table can prove to be a fundamental hurdle unless the mediation is compulsory.^{Footnote 5}

Arbitration

Arbitration, on the other hand, involves the intervention into the dispute of an impartial decision-maker with the power to impose an outcome based on the evidence and arguments presented by the parties or their representatives. Once a party has contracted to pru1icipate in arbitration, the party cannot unilaterally withdraw. The arbitration process ends with a ruling made by the arbitrator, which ruling is commonly referred to as an award. Arbitration is different from adjudication given that the arbitration forum is selected by the parties - either ad hoc, by contractual undertaking, or by adhesion to a standing procedure- and given that the arbitration forum is non-governmental.^{Footnote 6}

Arbitration can also be an advantageous process to the parties in a dispute as the disputants can choose the arbitrator(s). Much like mediation, arbitration can be private, confidential, and "without prejudice." It can also be much faster than a court proceeding. Indeed, the Arbitration Act of Ontario only calls for two requirements: the arbitrator must be impartial and each patty must have a full and fair opportunity to present his/her case. As such, the parties may agree that the procedure and presentation of evidence will take place on an informal basis, with minimal technical rules, and with no appeals to the courts. Another advantage is the fact that courts can and most often do enforce the decisions of arbitrators.^{Footnote 7}

The disadvantages of arbitration are much like those described for mediation above. Perhaps the only exception is with regards to the fact that once arbitration has been agreed upon, arbitration becomes a mandatory process. A major weakness of arbitration, however, is in relation to the significant costs associated with it which may, at times, undermine the advantages of using this ADR process altogether. Given the fees attached to retaining the services of an arbitrator and of legal representation, arbitrations may be better left to disputes involving larger sums.^{Footnote 8}

In order to maximize the advantages associated with the ADR techniques discussed above, it is important to keep in mind that - while federal departments may have their own internal ADR mandated processes- safeguards imposing strict time limits should be put in place for each stage of the ADR process. In addition, the use of actual and perceived independent facilitators, mediators and arbitrators should be implemented in order to prevent ADR processes from stalling the resolution of disputes and suppliers from abandoning their claims.

Mandatory ADR

Mandatory ADR and, in particular, mandatory mediation appear to be consistent with the principles of ADR as outlined above. The mandatory nature of ADR in the examples discussed below has not resulted in any harm to the respective systems. To the contrary, making ADR mandatory has obligated pa1ties to come to the tab)e to solve their disputes at an early stage resulting in more durable, cost-efficient and timelier solutions. Of note is the fact that the mandatory ADR schemes set out in the examples below share characteristics in common with the
ADR techniques as outlined above.

The success of mandatory ADR is evidenced by the great number of cases settled and by the fact that mandatory ADR is still in place in all of these instances. In the particular case of the Ontario Mandatory Mediation Program, mandatory mediation has been in place for over a decade. The increasing prevalence of mandatory ADR in the general context of dispute resolution is also a reflection of its effectiveness. Indeed, even in situations where the legislation has called for ADR only, the jurisprudence has elevated the existing dispute resolution requirement to the level of mandatory ADR. However, mandatory ADR should only be considered where there are adequate supervisory legislative and regulatory powers in place capable of establishing the mandatory process, monitoring the successful outcomes, and correcting any deficiencies in the process.

Ontario Mandatory Mediation Program

Under Rule 24.1 of the Ontario Rules of Civil Procedure, civil actions that are subject to case management are referred to mandatory mediation. Similarly, under Rule 75.1, contested estates, trusts and substitute decisions matters are referred to mandatory mediation.

• 24.1.01 This Rule provides tor mandatory mediation in specified actions, in order to reduce cost and delay in litigation and facilitate the early and fair resolution of disputes.

• 75.1.05 (1) In a proceeding described in subrule 75.1.02 (1), except a contested passing of accounts under rule 74.18, the applicant shall make a motion, in the same way as under rule 75.06, seeking directions for the conduct of the mediation.^{Footnote 9}

These Rules form part of what is known as the Ontario Mandatory Mediation Program, which has been in place in Ottawa and Toronto since 1999 and in Windsor since 2002. The success of this program is evidenced by the fact that the vast majority settle well before trial.^{Footnote 10}

Under the Ontario Mandatory Mediation Program, cases arc assigned to a mandatory mediation session early in the litigation process in order to give parties the opportunity to discuss the issues in the dispute. Assisted by a trained mediator who acts as a third party neutral and who has no authority to impose an outcome, the parties are able to explore settlement options at a very early stage. Under both Rules, parties may agree to select a mediator from the Program's roster of approved mediators or one who is not on the roster. This mediation process is informal and completely confidential, and the resolutions are tailored to the common needs and interests of the parties. In keeping with the private nature of the mediation process, what is said in the mediation remains confidential information.^{Footnote 8}

Under these Rules, the mediation process is both time-constrained and cost-efficient. Under Rule 24.1, for example, parties have 30 days after the first defence is filed to choose a mediator and the mediation must take place within 90 days after the first defence is filed. Similarly, under Rule 75.1, parties must bring a motion for directions in relation to the conduct of a mediation within 30 days after the last day for serving a notice of appearance. Once selected, the mediator is required to immediately fix a date for the mediation. Concerning payment for the mediation, both Rules state that each party is required to pay an equal share of the mediator's fees, unless the court orders otherwise.^{Footnote 8}

Ontario Insurance Act

Under subsections 258.6(1) & (2) and 258.5(1) & (5) of the Ontario Insurance Act, claims for loss or damage from bodily injury or death in relation to motor vehicle accidents are subject to mediation.^{Footnote 13}

• 258.6 (1) A person making a claim for loss or damage from bodily injury or death arising directly or indirectly from the use or operation of ~m automobile and an insurer that is defending an action in respect of the claim on behalf of an insured or that receives a notice under clause 258.3 (1) (b) in respect of the claim shall, on the request of either of them, participate in a mediation of the claim in accordance with the procedures prescribed by the regulations. [Emphasis added]

• 258.6 (2) In an action in respect of the claim, a person's failure to comply with this section shall be considered by the court in awarding costs.

• 258.5 (1) An insurer that is defending an action for loss or damage from bodily injury or death arising directly or indirectly from the use or operation of an automobile on behalf of an insured or that receives a notice under clause 258.3 (1) (b) from an insured shall attempt to settle the claim as expeditiously as possible. [Emphasis added]

• 258.5 (5) In an action for loss or damage from bodily injury or death arising directly or indirectly from the use or operation of an automobile, an insurer's failure to comply with this section shall be considered by the court in awarding costs.

Given the recent Ontario Court of Appeal decision of Keam v Caddey, mediations under these subsections are now seen as mandatory. In this case, the Court of Appeal ruled that there are no exceptions to the obligation to attend mediation and that, as a consequence, failure to attend mediation will result in significant cost consequences.^{Footnote 14}

• The legislature has clearly determined that in every case where one party is willing, mediation is the best way to try to promote the settlement of claims and to avoid the expense of a possibly lengthy and certainly costly trial. The legislature has provided no exceptions to this policy or to the obligation to mediate that it has imposed to implement the policy.

• Because there are no exceptions to the obligation, the insurer has no option whether or not to participate. There can be no legitimate reason to refuse to participate because to elect not to participate constitutes a breach of the insurer's statutory obligation.^{Footnote 15}

The rationale behind making mediation mandatory is directly tied to the benefits that derive from it. Such rationale has been explained by the Ontario Court of Appeal in McCombie v. Cadotte in the following manner:

• [F]ailure to comply with a request … can lead only, in some cases, to a claim not being settled as soon as it might otherwise have been settled if there had been compliance. In these circumstances, the consequence is that more time and expense would have been spent on the claim than, possibly, should have been spent. It seems to me that the possible costs sanctions provided for in ss. 258.5 and 258.6 are responses logically tailored to remedy the effect of non-compliance. The failure to settle sooner results in increased costs; accordingly, the remedial penalty is to be incorporated in the costs order in the proceeding.^{Footnote 16}

Under subsection 280(1) of the Act, statutory accident benefit claims are also referred to mediation.

• 280. (1) Either the insured person or the insurer may refer to a mediator any issue in dispute in respect of the insured person's entitlement to statutory accident benefits or in respect of the amount of statutory accident benefits to which the insured person   is entitled.^{Footnote 17} [Emphasis added]

In keeping with the principles of ADR, the Insurance Act stipulates under subsection 11(5) that "[a] mediator shall not be required to testify in a civil proceeding or in a proceeding before any tribunal respecting any mediation conducted under this Act or respecting information obtained in the discharge of the mediator's duties."^{Footnote 8} The Act also calls for a speedy and cost-effective resolution of the dispute through the practice of ADR.^{Footnote 8}

Ontario New Homes Warranties Plan Act

The Ontario New Homes Warranties Plan Act applies to all new homes sold in Ontario, and is administered by the Tarion Warranty Corporation. Under section 17 of the Act, a dispute resolution process comprised by the techniques of conciliation and arbitration is provided for disputes between a builder and a purchaser in relation to warranty matters. According to this dispute resolution process, parties in a dispute cannot start or defend an action against one another until they have allowed the Corporation to invoke its conciliation function. In addition, disputants are bound by the terms of their contract to attend arbitration. In this way, the parties must submit to a mandatory ADR process at an early stage of the dispute.^{Footnote 20}

• 17 (1) The Corporation may, upon the request of an owner, conciliate any dispute between the owner and a vendor.

• 17 (2) Where there is a dispute between a vendor and an owner arising out of the contract, neither party shall commence any proceeding in respect thereof until after fifteen days after the party notifies the Corporation of the dispute tor the purpose of giving the Corporation an opportunity to effect conciliation.

• 17 (4) Every agreement between a vendor and prospective owner shall be deemed to contain an agreement to submit present or future differences to arbitration, subject to appeal to the Divisional Court, and the Arbitrations Act applies.^{Footnote 21}

As a complementary option to the scheme set out in section 17 above, the Builder Arbitration Forum was established in 2003 to give builders the opportunity to dispute findings made by Tarion in its conciliation reports. The Forum provides for a fast, fair and affordable process where arbitrators will hear both sides of the dispute and make a binding decision. Participation in the Forum is voluntary. Therefore, if a builder chooses not to arbitrate, the conciliation report will be considered final unless the homeowner requests a hearing before the License Appeal Tribunal. On the other hand, if the builder chooses to arbitrate, then Tarion is obligated to participate in the dispute resolution process. In other words, once the builder chooses arbitration, arbitration becomes mandatory and the other party cannot decline participation in it.^{Footnote 22}

OPO ADR Services

In an effort to resolve disputes between federal departments and suppliers in connection with the interpretation or application of a contract, the Office of the Procurement Ombudsman (OPO) offers a number of ADR services such as facilitation and mediation. Facilitation involves the intervention of a third person, who is usually a member of the OPO and who encourages dialogue between the parties. The goal of facilitation is for the parties in a dispute to arrive at a mutually acceptable solution. Much like facilitation, mediation involves a third party neutral who has substantial knowledge of the subject matter and who can aid parties arrive at a mutually acceptable outcome.^{Footnote 23}

In accordance with the Procurement Ombudsman Regulations, once a request from one of the parties to the contract for dispute resolution is received by the OPO and following upon an assessment by the OPO to confirm that the circumstances comply with the OPO Regulations, the OPO will seek the consent of the other party to the contract to participate in the dispute resolution process. If the other party refuses to participate in the ADR process, this constitutes the end of the effort and the uncooperative party is not penalized.^{Footnote 24} As a recent study shows, out of the 18 requests tor ADR services received by the OPO during the period of 2008/09 to 2010/11, only 10 proceeded to dispute resolution while the other 8 had to be abandoned as one of the parties refused to participate. In other words, the number of instances where a given department declined to participate in ADR was almost equal to the total number of ADR processes undertaken.^{Footnote 25}

At a first glance, the ADR services offered by OPO appear to be consistent with the principles of ADR as outlined above. A member of OPO who possesses knowledge of ADR techniques acts as a facilitator or mediator. The OPO member in this context enjoys no decision making powers. It is the facilitator's/mediator's goal to encourage parties to arrive at a mutually beneficial solution crafted by the disputants themselves. The OPO ADR services also focus on providing a mechanism that is cost-efficient, time-conscious, and confidential.

The fact that participation in OPO ADR services is voluntary is also in keeping with the principles of ADR. This is not to say, however, that should ADR services be made mandatory they would automatically become inconsistent with the ADR principles. To the contrary, given the positive examples of the Ontario Mandatory Mediation Program, the Insurance Act, and the Ontario New Home Warranties Plan Act mandatory ADR could still encompass the basic tenets of ADR already in place by OPO - such as third party neutrality, confidentiality, cost and time efficiency, and party participation - while also attracting better results in the settlement of disputes. In this way, mandatory ADR has the potential of abiding by the principles of ADR while also adding great benefits in increased conflict resolution and in the preservation of business relationships between federal departments and the private sector.

II. Are there any suggestions on ways to increase the use of OPO ADR services?

Given the nature of the OPO ADR services as explained above and, in particular, given the emphasis on obtaining the consent of both parties in order to pursue a dispute resolution mechanism, participation in OPO ADR services has not proven to be as successful as it was originally envisioned. A number of suggestions come to mind in order to increase the use of OPO ADR services by both suppliers and federal organizations:

1. Establishing a roster of approved mediators and arbitrators in order to ensure impartiality in the resolution of disputes and secure the trust of federal departments and suppliers alike. Such mediators and arbitrators, however, cannot be members of the OPO if third party neutrality and use of specialized ADR knowledge are to be promoted. While the OPO may regard itself as an independent entity, the reality is that it may he viewed by some representatives of federal organizations as performing a policing role. With this perception, it may be difficult to increase participation. In addition) if the program is as successful as it is hoped, the volume of disputes to be addressed may exceed the OPO's capacity.
2. Establishing an oversight body in charge of setting up and maintaining the roster of mediators and arbitrators, and of monitoring the effectiveness of the process as has been done in the Ontario Mandatory Mediation Program. Tills should assist in gaining the confidence of suppliers and representatives of the federal organizations in the process, which in turn should be reflected in increased participation.
3. Establishing a mediation/arbitration mechanism, also known as "med/arb," whereby the dispute resolution can encompass a relatively simple two-step process. First, the parties can retain one neutral third party to assist them in reaching a negotiated agreement. Second, if such mediation fails, the parties can retain that same neutral third party to make a binding decision.
4. Limiting the time spent on mediations and arbitrations in order to save disputants time and resources. For example, the following process should be given consideration:
   1. Mediations:
      1. Disputes involving claims under $100,000 are to be limited to three hours.
   2. Arbitrations:
      1. Disputes involving claims of $25,000 or less are to require written submissions no lengthier than 20 pages. Arbitrations under this heading are not to be appealed in order to give finality to an arbitrator's decision in less complicated matters. In addition, med/arb is to be given serious consideration under this heading given the amounts involved.
      2. Disputes involving claims over $25,000 but under $100,000 are to require written submissions of 20 pages as well as a half-day of oral submissions. Arbitrations under this heading arc to be limited to two days only.
      3. Disputes involving claims above $100,000 are to require full-fledge arbitrations.
5. Implementing standard contracts including provisions that call for mandatory mediation and/or arbitration, as in the example of the British "Dispute Resolution Commitment."
6. Preparing standard agreements to govern the mediation and arbitration processes. Having such agreements in place will simplify and therefore help reduce the cost of the process. The more straightforward the process, the more likely it is that parties will want to participate.

The advantages and disadvantages of these suggestions do not differ much from those already outlined in relation to facilitation, mediation and arbitration under Parts I.a), b) and c) of this paper. The case of med/arb, however, attracts a different set of concerns as critics have often pointed out that mediation and arbitration by the same person is inherently incompatible. The job of a mediator is to encourage settlement, which settlement may or may not be strictly consistent with a party's rights under the law. The mediator may also use techniques, such as playing devil's advocate, which may put into question the mediator's impa1tiality. The job of an arbitrator, on the other hand, is to act fairly and impartially in accordance with the Arbitration Act. In addition, mediation calls for frank discussion with the mediators, often in caucus sessions, where information may be revealed that may not be helpful to the party' case and that may not have been revealed during arbitration. Once revealed in a med/arb, this information would be considered in the arbitration stage. This could result in parties not being frank during the mediation stage, which would lessen the likelihood of success at the mediation stage. While med/arb, much like mediation and arbitration, has a number of disadvantages associated with it, this should not detract from the fact that med/arb is still a very unique technique that offers parties in a dispute a one-stop-shop or a single tmit1ed procedure where they can solve their disputes in a much shorter period of time than if they pursued mediation and arbitration as two separate procedures. As such, med/arb can save disputants a considerable amount of time and money, while still tailoring the process to meet the specific needs of the parties in a private and amicable setting.^{Footnote 26}  Indeed, in one way or another, all of these suggestions are beneficial in that the OPO ADR services could be seen as even more impartial, time and cost-efficient, and more focused on creating solutions crafted by the disputants themselves and aimed at preserving business relationships.

III. Does the OPO have authority to make ADR services mandatory on federal government departments? 

As set out in subsections 22.1(3) and 22.1(4) of the Department of Public Works and Government Services Act, the mandate of the Ombudsman is to investigate complaints of wrongdoing and review the practices of government institutions for acquiring material and services. In other words, the Ombudsman can only make recommendations.^{Footnote 27}

• 22.1(3) The Procurement Ombudsman shall, in accordance with the regulations,

  1. review the practices of departments for acquiring materiel and services to assess their fairness, openness and transparency and make any appropriate recommendations to the relevant department for the improvement of those practices;

  2. review any complaint respecting the compliance with any regulations made under the Financial Administration Act of the award of a contract for the acquisition of materiel or services by a department to which the Agreement, as defined in section 2 of the Agreement on Internal Trade Implementation Act, would apply if the value of the contract were not less than the amount referred to in article 502 of that Agreement;

  3. review any complaint respecting the administration of a contract for the acquisition of materiel or services by a department; and

  4. ensure that an alternative dispute resolution process is provided, on request of each party to such a contract.

• 22.1 (4) The Procurement Ombudsman shall also perform any other duty or function respecting the practices of departments for acquiring materiel and services that may be assigned to the Procurement Ombudsman by order of the Governor in Council or the Minister.^{Footnote 8}

Even though the OPO does not have the specific authority to make ADR services mandatory, the OPO should consider setting up a process similar to the British model that could lead the Minister - under the authority established by subsection 21 (1) of the Act - to establish standardized and uniform ADR processes in procurement contracts or frameworks including the option to have recourse to OPO ADR independent services. Such changes could be made either through legislation, regulation or mandated standard operative procedures. This process could start with the OPO conducting a review of the adequate or satisfactory use of intra-departmental ADR by some of the principal federal departments that engage in it. The review could focus on which internal ADR processes, if any, have resulted in long delays and in major dissatisfaction on the part of some suppliers.

While the OPO has obtained legal advice that the section 22.1(3) prevents the OPO from establishing a review past the "acquiring" stage of the procurement process, it is our belief that this interpretation is not accurate. Even the ordinary meaning of the word "acquiring" can be interpreted as involving not only the act of contracting for goods and services but also the delivery of those goods and services. The opening words of the section refer to "reviewing the practices of acquiring materiel and services…" with a view to ensuring fairness, openness and transparency. The very purpose of the sections cited above that focuses on the fact that fairness, openness and transparency could be negated if the review of the practices of the procurement process stops at the acquiring stage. In addition, disputes that arise after the goods or services have been acquired often relate to what happened before the acquiring stage. The legal opinion bases its view on dictionary definitions of only one word of the section. This is an approach that is not consistent with standard techniques of statutory interpretation in Canada which requires "the words of an Act to be read in their entire context and in their grammatical and ordinary sense harmoniously with the scheme of the Act, the object of the Act and the intention of Parliament."^{Footnote 29} If the object of these relevant sections of the Act is focused on fairness, openness and transparency, to interpret the review mandate at stopping only at the acquiring stage would undermine both the context of the section and the object of this part of the Act.

The above interpretation of section 22.1(3) could then lead to a practice review by the OPO of the fairness of the OPO process. Once the review of the OPO of the fairness of the internal ADR processes has been completed – if there is a finding that there is a need to standardize and make uniform across the government ADR processes in the interests of "fairness, openness and transparency" – the OPO could consult with the Minister to suggest following the British model as discussed below, which model proposes a form of standardized ADR processes. In particular, the OPO could suggest the option to use OPO ADR services whenever suppliers express concerns in relation to the department's practices for acquiring goods and services, which can be seen to include their ADR processes. Therefore, the option still exists for the OPO to suggest the implementation of a dispute resolution model mirrored on the British "Dispute Resolution Commitment." Under this model, the OPO could obtain a greater commitment from government departments and their agencies in relation to dispute resolution; thus avoiding the issue of mandatory ADR altogether.

The British "Dispute Resolution Commitment" (DRC) model was implemented in 2011 to replace the "Alternative Dispute Resolution Pledge" of 2001. Its purpose is to encourage government departments and agencies to use dispute resolution in order to avoid, manage and resolve disputes arising out of contractual engagements between government departments and suppliers of goods and services. In general, the DRC covers two main areas of dispute: 1) contractual disputes for goods and services, and 2) general claims brought by individuals or organizations against government departments and their agencies. Through the DRC, government departments in Great Britain have made the following commitments: be proactive in the management of potential disputes in order to avoid the need for dispute resolution; include dispute resolution mechanisms within their complaints and disputes handling procedures; engage in a process of appropriate dispute resolution in respect of any dispute not resolved through their normal complaints procedure; adopt appropriate dispute resolution in their standard procurement contracts with other parties; use prompt, cost-efficient and efficient processes for resolving disputes; choose dispute resolution mechanisms proportionate in costs to the issues that need to be resolved; recognize that the use of appropriate dispute resolution processes can often avoid the cost in time and resources of going to court; educate their employees and officials in appropriate dispute resolution techniques; etc. The terms of the DRC are mandatory to government departments and their agencies.^{Footnote 30}

Conclusion

As the body in charge of investigating and attempting to resolve complaints, and of reviewing the actions of government institutions in relation to their procurement practices, it is the OPO's role to facilitate communication between the federal department and the supplier. As such, the OPO offers ADR services that are aimed at settling disputes at an early stage and at preserving the business relationships between the parties. Given the fact that government departments have their own ADR processes that often result in lengthy and costly ordeals and given that the ADR services provided by the OPO are not mandatory, the OPO ADR services have not been capable of achieving their maximum potential. Indeed, as a recent study shows, the number of ADR cases settled by the OPO was almost equal to the number of claims that were abandoned mostly due to the fact that one party declined participation in it. However, there is no doubt that where both parties have agreed to make use of OPO ADR services, these have been very successful in ensuring an early settlement of the dispute. All that is needed is a way to increase the number of parties that come to the dispute resolution table to air their grievances. Imposing mandatory ADR on the government departments, while consistent with the principles of ADR, may not be the best answer to this problem given the legislative constraints of the OPO itself. Nevertheless, a review of existing practices could lead to suggestions to the Minister in relation to the possible implementation of a model mirrored on the British "Alternative Dispute Commitment."

Date modified:

2025-04-23