Types of disputes
In the taxonomy of litigation, there are three types of disputes.
Factual
Factual disputes concern what happened. For instance:
you shot him! I did not!
you agreed! No way!
I did not have sexual relations with that woman. You did!
To resolve these disputes, parties present their version of events to the decision maker. The decision maker hears witnesses, watches cross examination and reads documents. Ultimately, they decide who to believe.
Factual disputes are quests for truth, not legal debates. Deciding who to believe is an exercise in common sense. Once done, the legal conclusion is often obvious (after all, if the defendant wasn’t there, they’re not guilty). This means ordinary people can decide factual disputes, with juries the quintessential example.
Being believed requires evidence, so lawyers must be good at finding and presenting it. They must be good storytellers. Legal mastery is less important, as while the law is never irrelevant, command of legal principles is secondary to the ability to tell a convincing tale (“Here are the six reasons you should believe my client was not involved”).
Factual disputes are hard on clients, from at least two perspectives. There is the time cost. Clients must heavily assist with preparation as they are the primary source of the evidence necessary to win. And there is also the psychological cost. As the parties disagree about what happened, they are implicitly (and often explicitly) calling each other liars. This is upsetting, and the trauma can linger.
Factual disputes are also hard on the court system — they are tough to settle, and therefore occupy significant court time. Settlement can be elusive because when litigants become upset, they often also become intransient, entrenched and embittered. So even if the lawyers can agree on a fair settlement sum, the litigants themselves might sabotage any deal because of an unwillingness to back down.
Even if the lawyers can agree on a fair settlement sum, the litigants themselves might sabotage any deal because of an unwillingness to back down.
Factual disputes are common. People readily disagree about what happened when it is in their interest. They also take time. Preparing and presenting evidence from multiple witnesses is time-consuming. Hearings take weeks or months, not hours or days, and are unpredictable as the drama of the story unfolds. As lawyers charge hourly, factual disputes are commensurately expensive.
What of appeals? Rare. Appeal courts cannot decide who to believe without re-hearing the evidence themselves. Only clear error warrants intervention.
Standard Disputes
Standard disputes ask whether behaviour was reasonable. Such tests, and similar variations, are common.
For instance:
You were careless! I was not!
That homicide was justified! No chance!
You didn’t use your best endeavours. I did!
These are not disputes about what happened. They are disputes about agreed facts are characterised.
Parties will present arguments about why the conduct did, or didn’t, meet the standard. The decision maker balances the arguments and makes the (often instinctive) call. In doing so they are supposed to channel the collective wisdom of society. This common sense, but representative, task is again well suited to juries.
Standard disputes are also common. The law has many objective and vague standards (i.e. reasonable person, all necessary steps, best endeavours). The vagueness is necessary to give the law flexibility to deal with different scenarios. But it also encourages disagreement.
To win these cases, lawyers must convincingly explain why society should or should not condone certain behaviour. Most effectively, this takes thinking about the behaviour broadly. Will insurance premiums rise? Will people drive recklessly on the roads?
Standards disputes are easier on clients. The facts are agreed, so they don’t need to help gather evidence. And while no-one likes to be accused of being negligent (or similar), litigants are likely to privately acknowledge there could be different views. This cools tensions, encouraging settlement.
Cases that don’t settle finish quickly. As what happened is agreed, witnesses are unnecessary. Even cases with experts (to explain whether a professionalstandard was met), a trial about the characterisation of behaviour will be brief. Not coincidentally, this makes standard disputes cheaper than their factual counterparts.
But appeals are still rare. The tests are common sense ones. Appeal judges have no more authority to decide whether a standard was met.
Appeal judges have no more authority to decide whether a standard was met.
Legal Disputes
Finally, legal disputes ask how the law applies to what happened. For instance:
are waiters’ tips subject to income tax?
does an advertisement create a legally binding promise?
are private parking fines enforceable?
In the common law world, decision makers resolve the disputes by analogy. How have similar cases in the past been resolved?
Lawyers will submit why particular past cases (favourable to their client) are appropriate analogies (or precedents). They may also suggest that certain legislation or contract terms are applicable. Reconciling these submissions requires legal training, meaning judges (and only judges) should decide legal disputes.
Lawyers like legal disputes. It is our comfort zone. We study the rules and how they apply. But somewhat ironically, legal disputes are the rarest type.
To win legal disputes, lawyers need knowledge of cases accumulated through study and experience. Selecting a helpful case, they argue it is a suitable precedent. In novel disputes (like about unique contracts), knowledge is less helpful than creativity. But regardless, these are intellectual debates, and legal smarts are non-negotiables.
Being disputes about the law, clients cannot contribute to preparation, and are relegated to being (financially) interested observers.
And in these these dry academic debates, they will rarely be emotional. This theoretically should help settlement. But as legal disputes often emerge only after the facts settle, sunk legal costs can be a psychological barrier against this. (The “I’ve come too far to settle now” mentality).
Hearings are quick. Days at most. But cost remain high. Short presentations belie long preparation, and the legal scholars required to win are rare, in demand, and (hence) expensive.
And appeals? More common. Senior judges are well qualified to check the legal conclusion of lower courts. And as legal decisions form new precedents, there is public utility in having the correctness of decisions scrutinised.
Complexity
Above is a clear trichotomy: factual, standard and legal. Alas, the real world is more complex.
Alas, the real world is more complex.
Some (apparent) disputes, are not. Coaxing money from a disinclined debtor can require a lawyer, the court and the weight of the law, but unless the defence is more sophisticated than “I’d rather not pay”, there is no dispute.
Also unhelpful to taxonomy — disputes mutate. Many are born as simple creatures (“you negligently ran a red light and injured me”). Then distractions multiply. The defendant replies:
“prove I own a car”;
“prove I was driving that day”;
“in any case you hurt yourself playing football”;
“and you are not that badly injured,”
adding:
“plus you were drunk”;
“and I was out of my mind!”.
The real dispute (“what colour was the light?”) is obscured by the proliferation of arguments.
This happens because (a) erecting arguments is cheap — just pen to paper; and (b) throwing lots of darts increases the chances of a hit. Contrast the military, where attacks are expensive, and discrimination necessary.
Moreover, the line between standard and legal disputes can be hazy. Both concern the meaning of words. But is a word (like, “dishonest”) a common sense word applicable by a jury? Or a word with a careful legal meaning, defined by years of preceding cases? Regularly unclear, it makes categorisation controversial (though the fact the border is disputed should not stop us recognising two countries exist).
Why should we care about categorisation?
Several reasons.
Society can allocate decision makers. Otherwise we risk inefficiency (if an overqualified judge must use common sense) or failure (if an unqualified jury decides legal issues). Neither is good.
More selfishly for lawyers, it assists preparation. Recognising each dispute requires a different outcome (i.e. believe me, condone my behaviour or adopt my legal analysis) facilitates sensible planning.
Clients will be prepared. While we cannot guarantee outcomes, understanding what’s disputed facilitates sensible predictions. Legal disputes are readily appealed. Factual disputes take time. Standards disputes can settle. Clients are forewarned, rather than simply being told “litigation is unpredictable”.
While we cannot guarantee outcomes, understanding what’s disputed facilitates sensible predictions.
Clients can also pick a lawyer. The skills required for each case are different. Do you need a legal technician? Or a good storyteller? A mix? By knowing what type of dispute they have, the client will be armed with the right questions. (After all, what is better: a tractor or the Ferrari? It depends on the road.)
Courts can deploy the right tools. For instance, discovery is the most expensive step of modern litigation. But if the dispute is not factual, courts may skip it.
Eye on the prize
Correct characterisation also brings focus. Standard and legal disputes often deteriorate into factual disputes as defendants reflexively deny all facts of a claim.
This happens for two reasons.
First: the defendant might be unclear themselves about what happened. When you don’t know, it’s safer to deny.
Second: denying facts is the easiest defence. “I asked you to wash the dishes”. ‘No you didn’t!”. It requires no law degree, nor any real imagination. It’s very accessible.
So it’s common for defendants to deny facts, almost reflexively. But it’s also a wasteful tendency.
Consider this example:
Tax agency: Those tips you received are taxable.
Waiter / Defendant: What tips?
The flat denial requires the court resolve a factual dispute (“did the waiter earn any tips”) before the legal dispute (“are tips taxable?”) is considered. And as it is a factual dispute, it will take time, expense and may, from mutual accusations of dishonesty, become heated. Of course, sometimes making a factual defence and starting a factual disputes is appropriate, but this warrants a careful and deliberate choice — not basal instinct.
This is not to deny anyone a defence. But understanding what’s really in dispute (facts, standards or the law) equips the court to probe and test. Do you really deny receiving the tips? Or is this really a legal dispute about taxation of your tips?
Identifying the real dispute avoids wasting time on peripheral issues.
Avoiding disputes
Knowing what causes disputes helps avoid them.
Documenting everything prevents factual disputes. People rarely argue with records. Conversely, factual disputes without verifying evidence must be resolved in court — denial is otherwise too easy.
People rarely argue with records.
Standards disputes can eliminated by mandating specific rather than reasonable actions. But there are costs. We lose flexibility, and give law breakers a clear target to work around. Where the balance lies is a question for society.
Keeping the law simple and stable stops legal disputes. Uncertainty created by new laws or bespoke contracts invites disagreement.
Conclusion
No two disputes are the same. However, many are similar. By observing and extracting what makes disputes similar, we gain some helpful insights.
Lawyers often describe disputes as “criminal”, “commercial”, “environmental”, “personal injury” or similar. This provides a setting, but not a strategy. It is more helpful to ask what’s in dispute. Facts? Standards? Or the law?
And it is important we do. Because if our opponents recognise the type of dispute and prepare accordingly, even the smartest lawyer risks being defeated by overwhelming focus.
Every day, across the world, there are millions of disputes, but only three types. The key question is: which do you have?