Neutral Fact Finding Information & FAQs

Neutral Fact Finding & FAQs


What is Neutral Fact Finding?

Where a dispute involves an issue requiring expertise and that issue is a stumbling block to settlement, the parties may agree on a neutral third-party to decide that issue. The parties may make the neutral’s decision binding or not. Neutral fact finding can also resolve disputes involving a business entity’s internal affairs, like employment discrimination, where the company needs someone outside the company to investigate the charges.

“The reverse side also has a reverse side.” –Japanese Proverb

In these circumstances, the parties may agree that the fact finder’s report is for settlement purposes only and therefore not admissible if litigation ensues.


How Does Neutral Fact Finding Work?

Neutral fact finding is often used in a company or human resources (HR) setting, though it has also been used in some civil and governmental disputes as well. Once a problem has been identified, the companies and/or parties involved seek out a neutral. The neutral then begins to conduct their research into the problem via investigations, interviews, intake forms, or anything else they might deem applicable. Lastly, the neutral produces their report outlining their findings and recommendations. Note that these recommendations typically aren’t legally binding.


What are the Benefits of Neutral Fact Finding?

There are a number of benefits to neutral fact finding which is why organizations, people, and other entities sometimes opt for this route of alternative dispute resolution. These reasons include:

  • Objectivity: It’s easier for someone who doesn’t have a stake in either side of the argument to be objective when it comes to examining the facts of a dispute. Instead of searching for information and data that would back up their side of the argument, they simply can gather all the facts and then come to a recommendation from a position of neutrality.
  • Eliminate Power Differences: If one side of a dispute has millions of dollars of disposable income and the other has little-to-none, a neutral still examines the issue on an even playing field. Comparatively, a case that goes to court might be won not by who is in the right but who has the most money to spend on the best lawyers. A neutral is not swayed by disparities in power.
  • Not Legally Binding: The observations and recommendations made by a neutral are rarely legally binding, meaning there can be more negotiation and debate even after the fact finding is over. This is in contrast to a trial or arbitration in which the final decision is often legally binding.