SharingDistributing money, assets, tasks and risks in a fair way

In most conflicts and disputes, money, land or other limited resources have to be distributed or shared. Ideally, this distribution is done in a way that is fair, transparent, and informed by the needs and capacities of the parties involved. Objective criteria (formulas, market prices, and sharing rules developed through social norms or case law) relevant to the particular legal problem at stake can help to guide distribution decisions. The use of objective criteria to settle disputes in the shadow of the law is sometimes called “principled negotiation.” Without it, negotiations can drag on or leave the parties involved feeling that they were not held to the same standard as everyone else. 

Why is this a fundamental dispute resolution practice?

Dividing the resource “pie” is an essential part of resolving differences between people. This is particularly true for conflicts and disputes involving parties who are in an ongoing relationship and must interact regularly. Household tasks should be shared between family members; salaries and rents have to be adjusted to changing circumstances. In case of divorce or the splitting up of a business, assets need to be divided. Distributive issues may also arise out of one-time transactions in which the rights of the parties involved are ambiguous or the relevant laws are abstract and difficult to apply. A personal injury claim has to be settled for a certain amount of money, for example, and a crime may be associated with a particular penalty. 

In all of these disputes, sharing resources is necessary to reach a fair resolution. Doing so based on objective criteria increases outcome acceptance, reduces decision regret, and makes it easier for disputants to explain the outcome to others.

What are the active ingredients of sharing?

Making distribution decisions based on objective criteria.

These may include formulas, market prices, and sharing rules developed through social norms or case law.

Sharing rules (objective criteria) that are enduring, stable, adaptive, participatory, and characterised by collective choice.

Members of a community who have repeated dealings with each other and are motivated to maintain norms of fair business practices.

What are people actually doing to make this happen?

Parties
Parties are sharing resources and risks according to their rights, obligations and capacities. When no neutral third party is involved, they are gathering information about how other people in their situation have made distributive decisions in the past. They are respecting sharing rules and negotiating fairly rather than based on pure self-interest.
Parties
Mediators and judges
Mediators and judges are gathering information about ‘going rates of justice’ in order to give parties an idea of what a fair distributive outcome would be. This facilitates resolution and reduces the likelihood that parties will give away too much or regret the settlement they arrive at. Descriptive information, which tells parties how others have actually distributed value, is more likely to help than prescriptive information, which tells them how a higher authority thinks they should settle.
Mediators and judges
Justice leaders and innovators
Justice leaders and innovators are making it easier for parties, mediators, and judges to access information about how distributive decisions were made in the past at a low cost. Greater transparency around sharing rules makes it more likely that disputes over resources, rights, and obligations will be resolved fairly in the future.
Justice leaders and innovators
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What indicators can be used to monitor this practice?

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Fairness
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Distributive justice
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Transparency

What makes sharing difficult?

Behavioral barriers

A number of behavioural factors can get in the way of distributing money, assets, tasks, and risks in a fair way. First and foremost is disputants’ instinct to negotiate strategically in order to obtain the biggest slice of the pie. Tactics like making extreme offers, committing to making no further offers, or hiding information from the other party can cause parties to forgo or fail to reach a solution. These barriers can result in bargaining failure: a scenario in which both parties to the dispute are better off by making a deal or reaching a settlement but are unable to agree.

Cost barriers

Obtaining information about fair ways of sharing money, assets, tasks, and risks can be costly for individual disputants. This information can be shared and made available to people through the formal legal system, but the inaccessibility of courts and lawyers means that few people around the world will be able to access it. The reality that sharing rules may vary by location, the type of dispute, or the particular distributive issue at hand also makes it difficult for parties to ascertain the precise information they need and access it at a low cost.

More Resources

  1. Distributive issues are often a major bottleneck for resolving disputes. Legal norms (and in particular sharing rules) are helpful to reach a fair settlement, but there is little research yet about the process of using norms and fair outcomes in negotiations. 
  2. Principled negotiation, where distributive issues are resolved by a joint search for objective criteria, is recommended and taught by the Harvard Negotiation Project.  
  3. Jin Ho Verdonschot has shown that for any distributive issue it is possible to develop objective criteria, J.H. Verdonschot,  Sharing rules that work: Developing law as practical and concrete guidelines for fair sharing, PhD Thesis Tilburg, 2013.
  4. Maurits Barendrecht, Objective Criteria: Facilitating Dispute Resolution by Information About Going Rates of Justice, TISCO Working Paper Series on Civil Law and Conflict Resolution Systems, Tilburg University.
  5. Some papers about “fairness in negotiations”, “legal negotiation” and “compromise” summarily discuss the role of norms in dispute resolution, which can provide an anchorpoint for an acceptable solution.
  6. Elinor Ostrom, Collective Action and the Evolution of Social Norms, Journal of Economic Perspectives (2000).
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