Objective Criteria: Facilitating Dispute Resolution by Information About Going Rates of Justice

Abstract

Rules are often seen as commands that have to be observed. From the perspective of disputants, however, rules may also be tools for settling disputes. Fisher, Ury, and Patton famously recommend that negotiators look for objective criteria instead of dividing the pie by a contest of willpower. We investigate the role that objective criteria may have in dispute resolution. In particular, we study how objective criteria help parties to determine shares in liability, damages, profits, efforts, risks, timing, or other benefits and losses that have to be distributed among the parties.

We reviewed the literature on negotiation, compliance, descriptive social norms, conflict resolution, fairness, and distributive justice. We found nine suggestions for properties of objective criteria, which make them more suitable as guidelines to settle distributive issues. For each property, we also investigated which mechanism may contribute to lowering the costs of dispute resolution and to increasing the acceptance of the outcomes. On this basis, we suggest that legislators, drafters of contracts, courts, designers of dispute systems, and others wanting to contribute to conflict resolution consider investing more effort in creating and supplying objective criteria that possess the following qualities:

1. independent of willpower and allow for being applied objectively; 2. perceived as legitimate; 3. lead to outcomes that are continuous in character, not binary; 4. weigh similar elements of the situation on both sides; 5. belong to parties, reflecting their ideas about legitimacy and appropriate neutral evaluation criteria; 6. do not claim exclusivity over other objective criteria; 7. allow decision makers to tailor the outcome to the specific situation; 8. practical, in particular, requiring low-cost fact-finding; and 9. provide social information about actual application by others.

Keywords: Objective criteria, Rules, Negotiation, Dispute resolution

JEL Classification: D63, D74, K10, K40