“Alternative Dispute Resolution in Canada - United States Trade”
Notes for Remarks on a Panel on Legal and Regulatory Aspects
of the Canada - U.S. Free Trade Agreement

 by Jack R. Miller,

Member of the Bar of the Province of Quebec
and of the Law Society of Upper Canada

 Geonomics Institute Conference
“Making the Most of the Canada - U.S. Free Trade Agreement”

 Middlebury, Vermont
May 4, 1989

I  -  INTRODUCTION

I am a practitioner specializing in the resolution of conflicts and the settlement of disputes. My experience includes a steady stream of trade law disputes since 1969 when I took on my first anti-dumping case.

One of my early cases concerned the relative merits of American and Swiss circuit breakers when I cross-examined one of the parties for 3 days on the design of its circuit breaker. I felt I won my case in the cloakroom, however, when during a break for lunch the Chairman of the tribunal asked me as we were putting on our coats if I really felt that the domestic design was obsolete. Of course, I said “Yes”. Later, my Swiss clients were exonerated of dumping duties on the ground that customers had preferred their design.

It was not however until 1982 that I became cognizant of alternative dispute resolution, which was then in its infancy, when I attended the Annual Lectures of the Law Society of Upper Canada in order to keep my Ontario call up to date and heard a paper by Donald Brown and Peter Alley entitled “Management of Corporate Disputes” which referred me to Roger Fisher’s and William Ury’s Harvard Negotiation Project publication “Getting to Yes”, subtitled “Negotiating Agreement Without Giving In”. Since that date, I have voraciously consumed whatever materials I could find on the subject. I also began to apply it systematically in my law practice. I was thus able to understand where my clients were coming from and what they wanted. I have tried to provide it, I think, with some success.

And I would like to offer to you today some of my insights from this research, reflection and experience on the potential for application of “ADR”, as this approach has come to be nicknamed, in Canada-United States Trade.

In doing so, I would like to share with you a few observations of an unlicensed psychologist concerning the dynamics of conflict resolution and dispute settlement underlying the dispute settlement mechanisms of the FTA which have been expertly described by my co-panelists.

Conflict resolution and dispute settlement techniques have broad applications since they apply not only to putting things right when something goes wrong but also to putting things together in the first place. I believe that conflict is part of the human condition, furnishing an opportunity for more productive relationships.

My purpose is to stimulate and open up a wider view and thereby to make a small contribution to enable others to make the most of the Canada-U.S. Free Trade Agreement. I feel that as a lawyer it is my professional duty to make known to my clients the full range of options available to them in respect of their problem. I hasten to add that it is also profitable to do so. And Vermonters and Quebecers may have the opportunity to lead the way.

II - Alternative Dispute Resolution

It is customary to begin an introduction to a relatively new subject by a reference to precedent and tradition. Usually the reference is to the ancient Greeks; it seems there is nothing that they had not conceived. The purpose is to disarm the listener and lull him into a state of mind reminiscent of Bobby McPerrin’s hit song “Be Happy, Don’t Worry”.

So I’ll give you the customary reassurance first. We know that most people resolve their disputes themselves. We know that a very high percentage of disputes taken to court are resolved prior to a formal adjudication. We know that there is abundant precedent and an effective tradition of people themselves, often with the assistance of third parties, finding alternatives to formal adjudication.

Indeed the study of success is a method adopted by modern social scientists to disengage from the mass those elements responsible for success and put them in a new culture where they can breed more success. An example is the work of Fisher and Ury at Harvard. People report on their work regularly at conferences such as the recent National Conference on Conflict Resolution and Dispute Settlement in Montreal. The purpose of alternative dispute resolution is to speed up and enrich those processes so that more and better settlements occur earlier.

One could say that any good attorney worth his salt who survives the pressures of private practice regularly engages in alternative dispute resolution without being aware of it, like the person who didn’t realize that he was engaging in prose when he was writing something down. Alternative Dispute Resolution has moved on to and up the agenda of both the Canadian Bar Association and the American Bar Association so that one could argue that ADR is in the mainstream of the legal profession today.

The American Bar Association has produced in my opinion an excellent work on the subject entitled “Alternative Dispute Resolution: An ADR Primer” which in a concise, readable fashion summarizes the principal alternatives and answers questions frequently

asked about ADR.  The ABA Primer defines ADR as follows:

“ADR refers to a broad range of mechanisms and processes designed to assist parties in resolving differences.  These alternative mechanisms are not intended to supplant court adjudication, but rather to supplement it.”

The Primer then lists a number of ADR methods which have some counterparts under the FTA dispute resolution mechanisms described ably by my co-panelists. One could argue that the FTA and the GATT dispute resolution mechanisms are themselves ADR and one might refer to them as “public international law ADR” since the public authorities have a large part and the processes are institutionalized.

Personally, I find the term “ADR” ambiguous. Even though it is a handy and catchy reference, the term often gives rise to much confusion. I prefer the term ‘conflict resolution and dispute settlement’.  I like to think of it as a spectrum of approaches measured by the degree to which parties themselves resolve conflicts and disputes. At one end the parties do it themselves. At the other end, someone does it for them. In the middle, the parties do it themselves with the support of others.

I think of conflicts as something internal to a person or to an institution and of disputes as something involving two or more persons or institutions. The goal of conflict resolution and dispute settlement is not only to settle the dispute, i.e. patch things up, but also to resolve conflict, i.e. get to the bottom of things. In this context, I think of conflict resolution as the equivalent of nuclear fusion in terms of energy produced or released.

That was the good news, the comforting and re-assuring part.  Now for the bad news.  All is not well and there is a need for innovation to meet needs.  This is the challenging part, which sounds the retreat for many.

John W. Burton, who is associated with the Center for Conflict Resolution at George Mason University in Virginia, in his 1987 work “Resolving Deep-Rooted Conflict - A Handbook” makes in my view a useful distinction between what he calls “normal conflict” which in his view, and I agree, lends itself to intelligent management, and what he refers to as “deep-rooted conflict” which in his view, and I concur, calls for a more considered approach which Mr. Burton labels “facilitated conflict resolution”.

Mr. Burton makes in my opinion an informative history of conflict resolution which includes conflict resolution at the international level and might well have been the history of conflict resolution in Canada-U.S. trade. For example, Mr. Burton notes that classically at the international level “blatant power politics was practiced”. The purpose of international charters was to curb these practices, but essentially such charters were still based on a power philosophy. This approach has ignored in the view of Mr. Burton basic needs and for this reason has proved of limited use.

The modern approach is based upon the following realistic understanding of the human condition:

“The awareness of needs which cannot be compromised, cannot be made subject to some legal judgment, cannot be bargained, leads logically to the development of a process that enables parties to conflicts to ascertain the hidden data of motivations and intentions and to explore means by which common human-societal needs can be achieved.  As these needs of security, identity and human development are universal, and because their fulfillment is not dependent on limited resources, it follows that conflict resolution with win-win outcomes is possible.” 

This is really what ADR purports to address and what makes ADR in my opinion one of the most exciting technologies of all time. ADR is adisciplinary, i.e. it pertains to no particular discipline but rather to an interaction of disciplines, including disciplines derived from lay experience since ADR is not only a reform movement within the official justice community of lawyers and judges but also a grassroots intuitive phenomenon.

I have found validation of my own intuition and experimentation in the works of Mr. Burton and others. Recently, I have been working on the grand-daddy of all deep-rooted conflicts which also involve North American’s original free traders who incidentally continue to assert this right. I speak of the deep-rooted conflicts between the aboriginal or indigenous peoples, in particular the Iroquois Confederacy and their neighbours, Americans and Canadians. I am hopeful that these new approaches which sound in the traditions of the native people will bring about some win-win solutions for all concerned within a relatively short time-frame.

III - The FTA Environment

The FTA manages to mention competition and co-operation in the same breath. It is not surprising therefore to find that resolution of disputes is also a prime objective. The FTA objectives aim both “to facilitate conditions of fair competition within the free trade area” and “to lay the foundation for further bilateral and multilateral co-operation to expand and enhance the benefits of this Agreement”. I guess this means that it is O.K. for governments to co-operate but not for industries. I suppose this is why the objectives also seek “to establish effective procedures for the resolution of disputes”.

In my view, the emphasis will be on co-operation and not on competition, because co-operation produces more economic gain than competition. I feel that anti-trust considerations can be covered by involving all interested parties in the process and by the transparency of the process. In any event, in my view, anti-trust laws really sanction defects from co-operation and not co-operation itself.

I would classify the main disputes that are likely to arise in relation to the FTA as follows:

1.-    the unfair pricing practice known as dumping, which is really unco-operative behaviour, i.e. seeking to maximize one’s own gain without regard for others;

2.-    the distortions of governmental interventions in the economy in the form of subsidies and other measures - a co-operative equilibrium will be found;

3.-    integrity of the FTA, such as respecting the rules of origin, the classification systems, and its intent and purpose; and

4.-    elaboration of the agreement; various negotiations and other initiatives and processes to reach a consensus of greater specificity than the present.

I submit that the dispute settlement mechanisms of the FTA require supplementary mechanisms if the FTA is to achieve its potential. I think that the official FTA mechanisms should be reserved for those exceptional cases where the parties need more help, even to the point of having a matter decided for them. I think that parties come too soon to this process for want of an alternative and I think that too much is often asked or expected of the official mechanisms. I predict feelings of frustration and a receptiveness to alternatives.

In my view, there is an eerie unreality to anti-dumping and countervailing duty official procedures like one was taking part in a ritual or a ceremony, dancing around the problem. I sense that many of the disputes under the FTA are likely to fall into the category of deep-rooted conflicts. The FTA dispute resolution mechanisms are flexible enough that they could in time evolve into processes that meet the needs of groups in society such as industry and consumers. In this regard, pre-hearing administrative conferences could evolve into facilitated conflict resolution.

But I think in the short term the challenge falls to the private sector to facilitate the resolution of these deep-rooted conflicts by the groups themselves. I think that when jobs and plants are at stake it is not an exaggeration to feel in the presence of needs which in the words of John Burton “cannot be compromised, cannot be made subject to some legal judgment, and cannot be bargained”.

In the time that remains to me, I would like to outline briefly some of the steps that Vermonters and Quebecers might take to move towards filling this gap. Incidentally, I feel that the same process will fill another need, namely the need for assertiveness and autonomy. I think we’ll see more joint ventures and fewer acquisitions using this same approach, which will prevent other disputes.

IV - Facilitating Conflict Resolution

First, it is important in my view that we focus more on the dynamics of conflict resolution and dispute settlement rather than on what I will call the form. What is it in the process that leads to successful resolution and settlements? I think that we have to hunker down to where the action is. For instance, trade is carried on by business and not by government in North America. Moreover, the number of businesses carrying on trade on a daily basis is not as large as we might think. It is important to identify particular individuals and institutions and to think in terms of their interaction.

We know that the workhorses of conflict resolution and dispute settlement are (a) information exchange and (b) listening and analysis. We know that emotions are often determined by perceptions. Perceptions are frequently a function of information.  Distortions in perceptions can be corrected by information. Fears can be released by information. We know that resolutions and settlements are always facilitated by exchange of information. Thus we could focus on ways and means of facilitating an exchange of accurate and relevant information in a timely and appropriate manner.

We know that listening is a great healer. Listening validates and informs people.  Listening empowers people. We want to empower people. We want them to be freed of their fears and be able to consider alternatives. People who are defending themselves or who are attacking aren’t listening. They miss much valuable information. We want them to have the calm to be able to recognize win-win solutions. Listening is an art and a science. I believe that the work of Carl Rogers and others has great potential for the resolution of disputes. It is important to tap into it and apply it. In the conventional hearing, a party is “heard” by the tribunal. I think that it is important that in the same manner each party “hears” the other. Listening leads to a well-rounded analysis of the entire situation which reveals inevitably a range of options. Thus, we should set things up so as to facilitate listening.

Secondly, it is important in my view to promote and facilitate an interaction between or among the parties to a conflict or a dispute where the parties themselves are the central characters and others are the supporting cast. I think it is useful to think about ways and means of getting parties together. It may even be worthwhile to think about getting parties together who are not in dispute but who have had disputes in the past and are likely to have disputes again. Sometimes more can be accomplished when the interaction is not conditioned by a crisis.

In this context, several random thoughts come to mind which I hope are relevant though loosely connected. Resolution and settlement work best when the situation is cast as a common search for solutions which is conducted from particular perspectives rather than the classic adversarial stance. The physical arrangements are important to achieve this effect. The interactive method rather than the Rules of Order method of meeting is more conducive to conflict resolution and dispute settlement. Fisher & Ury stress the importance of being soft on the people while being hard on the issues. This formula sounds anodyne and is anodyne but it also involves for many a radical departure from convention.

Another thought: we know that there is a natural tendency to disorder and we have to invest energy to bring order out of disorder. I would like to quote from Stephen Hawking “A Brief History of Time:

“It is a matter of common experience that disorder will tend to increase if things are left to themselves. (One has only to stop making repairs around the house to see that!) One can create order out of disorder (for example, one can paint the house), but that requires expenditure of effort or energy and so decreases the amount of ordered energy available.

A precise statement of this idea is known as the second law of thermodynamics. It states that the entropy of an isolated system always increases, and that when two systems are joined together, the entropy of the combined system is greater than the sum of the entropies of the individual systems.”

Thus it is perhaps necessary to let go of a bit of order in the form of established routine, allow a bit of disorder in the form of parties sorting out a format that works for them, and hope that a new form of order would emerge in the guise of interaction among parties in conflict so that conflict may be resolved and the parties may make the most of the Canada-U.S. Free Trade Agreement. There may be some confusion, and we may feel uncomfortable, but let’s empower the parties, anyway.

REFERENCES

ABA, The Standing Committee on Dispute Resolution. Alternative Dispute Resolution – An ADR Primer, 1987.
Axelrod, Robert. The Evolution of Cooperation. New York: Basic, 1984.
Brazil, Wayne D. Effective Approaches to Settlement: A Handbook for Lawyers and Judges.  Prentice Hall Law & Business, 1988.
Burton, John W. Resolving Deep-Rooted Conflict - A Handbook. University Press of America, 1987.
CPR Legal Program.  ADR and the Courts - A Manual for Judges and Lawyers. Butterworth, 1987.
Fisher, R. and Ury W.  Getting to Yes - Negotiating Agreement Without Giving In.
Hawking, Stephen W.  A Brief History of Time - From the Big Bang to Black Holes.  Bantam Books, 1988.
Kohn, Alfie. No Contest - The Case Against Competition - Why we lose in our race to win. Boston: Houghton Mifflin Co., 1986.
Maine Law Review. Symposium - Alternative Dispute Resolution in Canada-United States Trade Relations. Vol. 40, No. 2, 1988.
Percy, M.B. and Yoder, C.  The Softwood Lumber Dispute & Canada-U.S. Trade in Natural Resources.  The Institute for Research on Public Policy, 1987.
Rogers, Carl R.  A Way of Being.  Boston: Houghton Mifflin Co.,1980.

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