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Article III, Section 7 of the Constitution: Alternative Dispute Resolution

Diderot Mirabeau
Neversleeper
Join date: 18 Jan 2006
Posts: 76
02-15-2006 05:56
As you're probably aware, article III section 7 of the constitution describes how the Scientific Council provides mechanisms of alternative dispute resolution to citizens of Neualtenburg on a voluntary basis by way of negotiation, mediation and arbitration.

With the advent of a notarisation facility at the Rathaus, which enables parties to enter into legally binding agreements the terms of which can be digitally verified it is safe to say that the foundation upon which the SC can perform such services has been thoroughly solidified to the extent where the SC needs not perform detective tasks for the verification of the premises of an agreement but can rather focus on the legal interpretation of the particular clauses and conditions of an agreement.

Simultaneously, it has been decided by the RA to implement initiatives aimed at facilitating the use of land around the Marktplatz for commercial purposes ideally transforming the city centre into a hub of commercial activities. The vision as advanced by some is that Neualtenburg may in turn become a preferred place for companies to set up headquarters since it will provide them with a stable legal framework as a foundation for entering into commercial agreements with the possibility of a resort to dispute resolution mechanisms.

In light of the above I think it'd be fair to expect that the provision of dispute resolution services by the SC will in the future be an increasingly important parameter by which Neualtenburg may differentiate itself from other communities seeking to attract commercial activities. It is not unlikely that individuals will also consider the legal framework we are building attractive when entering into agreements and commitments of one sort or the other.

I think it is reasonable therefore as a part of the ongoing discussion on constitutional reform to propose that we review the conditions under which alternative dispute resolution is offered by the SC in order that we may align this offering properly with what is practical and what is perhaps sought after by prospective residents - commercial or otherwise.

To be concrete I think there are two issues that we ought to consider in such a reform:

1) Might it not be feasible to demand that anyone wishing to make use of the arbitratation facilities of the SC have previously entered into a legally binding, written agreement notarised using the notary service in the Rathaus containing a clause, which specifies that any disputes will be settled through arbitration by the SC? This should guarantee that any future demand of the SC's services in this area will not put an undue burden of detective work on them in clarifying what were the exact contractual obligations entered into - which documents were in existence at the time and who has actually agreed to what?

2) As it is not unlikely that future businesses and residents may also want to enter into legally binding agreements with other parties not necessarily resident of Neualtenburg, would it not be worthwhile considering the idea of opening up SC dispute resolution services to cover agreements entered into where one or both of the parties are actually not resident of Neualtenburg? This would certainly broaden the scope of applications where the dispute resolution service would be considered relevant and useful by businesses since they would be able to offer a sort of guarantee that any disputes between them and their customers would be settled by a disinterested third party? It may even provide a competitive edge to businesses wanting to raise awareness of their credibility.

In order to assure that such a broadening of the availability of SC dispute resolution services does not lead to a flooding of the system and an undue burden on the members of the SC, it might be good to consider introducing a fee on the service, which should probably be differentiated according to the citizenship status of the parties relative to the dispute. For example, for cases involving two citizens dispute resolution could be provided free of charge as part of the services provided by the government. In cases where one party is a citizen the price to have a conflict resolved by arbitration would be say a nominal 100 - 500 L$ depending on the disputed amount in question and in cases where neither of the parties are citizens the dispute settlement would be provided according to cost.

It may be validly argued that the government of Neualtenburg would lack the means to enforce a settlement going against the interests of a person, who is not a citizen of Neualtenburg. This is of course true but it does not mean that the above proposals are useless since it would still be attractive for businesses to be able to offer their non-NA customers a guarantee of legal recourse where the business (residing in NA) is the only party that runs the risk of being sanctioned. Furthermore, the problem of sanctioning non-NA residing parties to a dispute, who do not agree to follow the conditions of a settlement could be somewhat remedied by having both parties to the conflict agree to deposit an amount in escrow prior to the imposition by the SC of a verdict in an arbitration case.

To summarise, I propose that we consider the following changes to this part of the constitution:

1) That the SC only offers arbitration between parties who have previously entered into a written agreement notarised at the Rathaus. Perhaps excepting cases where businesses want to offer legal recourse to individual clients on the basis of a statement of warranty, which should then be notarised instead.
2) That the SC also agrees to process cases where only one party to the conflict is a citizen of Neualtenburg demanding the prior deposit of a sum of money equalling the amount in dispute before settling any cases involving non-citizens.
3) That the SC be allowed to charge a fee for the provision of its dispute resolution services in cases involving parties, who are not citizens of Neualtenburg.

The benefit of the above changes would in my view be the further facilitation of a business friendly climate in Neualtenburg promoting the city as a legal haven in a sea of virtual anarchy.

Following the conclusion of a discussion on the above I shall be happy to work on the exact wording of a proposed amendment clarifying what needs to be changed exactly in the constitution as it presently stands.

P. S.: In today's edition of a nationally circulated RL newspaper of my country a news story describes "how paperless, public notarisation may soon be a reality. The government has proposed a bill that will allow for digital notarisation of for example loan agreements as soon as 2008 and is expected to reduce the waiting time for the processing of such documents from 10 to 0 days."

Ah, well ... the messy inefficiency of RL ;-)
Pelanor Eldrich
Let's make a deal...
Join date: 8 Feb 2006
Posts: 267
Excellent ideas
02-15-2006 07:58
Hi Diderot,

You've touched on a cornerstone of my business plan. I was planning to offer clients binding decisions based on either the SC conflict resolution mechanism (CRM) and the commercial CRM affiliated with Nota Bene in cases of dispute. I, the business owner (and at that point NAB citizen) would need to resolve a dispute with a customer, who is likely not an NAB citizen.

While Nota Bene, is great, and contains 2000+ lines of script, it costs $L100 per notarization, no? This is a bit of a barrier to doing business for me. If I found my business in NAB, I expected court cases to be either free, or to cost a nominal court fee. This makes sense, and the conflict resolution court cost would have to be split between the disagreeing parties. Court fees will have to be competitive with the Nota Bene affiliated CRM. A customer of mine may feel that the NABSC would not be wholly impartial, since I am a citizen and the other party is not.
Claude Desmoulins
Registered User
Join date: 1 Nov 2005
Posts: 388
02-15-2006 08:25
I kind of liked Diderot's suggestions. Whether $100L (approximately $0.35 USD) is a barrier or not depends on "compared to what?" If you want to use your business or the notary to resolve disputes over a $L500 transaction, then $L100 is a barrier. I'd argue that the transaction itself is probably small enough that resolving each and every dispute isn't worth one's time and trouble. You let it happen once, and then don't do business with the person again if you don't get a satisfactory resolution.

I think Diderot envisions this coming into play with larger "deals". For example, civic builds in the city have been costing around $L30000 ($100USD) a piece. In this context, spending $L100 to notarize a contract is economical and prudent.

I also don't see the necessity of a dichotomy between the ADR mechanisms outlined in Article III and the Notary. Diderot's proposed requirement that there be a notarized document before ADR can be implemented means the scope of any dispute will necessarily be limited by the agreed upon (and we know this because it's notarized) language of the document.