Beyond Structure: A Neuroscience-Informed Approach To Resolving Commercial and Civil Disputes

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Beyond Structure: A Neuroscience-Informed Approach To Resolving Commercial and Civil Disputes

Introduction

Commercial and civil disputes are rarely driven by legal or financial issues alone. They are also shaped by how parties experience the dispute, as emotional reactions, social dynamics, cultural expectations and personalities influence how parties perceive fairness, authority, identity, risk and belonging.[1]

Emotional and social processes operate rapidly and unconsciously, shaping what analytical thinking is possible. The model discussed in this article provides a practical framework for understanding these dynamics by distinguishing between three interacting operating systems: emotional (O/S 1), social (O/S 2) and analytical (O/S 3). For ease of reference, these correspond to instinctive reactions, relational positioning and analytical reasoning.[2]

This article integrates insights from neuroscience, social psychology and dispute resolution theory to show how conflict escalates when emotional and social systems become dominant, and how it can be de-escalated through effective process design. The tools discussed here provide a practical diagnostic checklist for identifying sources of perceived threat, and offer a way to bridge emotional, social and analytical dimensions.[3],[4] How these concepts can be applied is illustrated here in practice through a real case example.

A central insight is the concept of social plasticity: the capacity of individuals to shift between cooperative and adversarial modes depending on context. When combined with structured interventions, this creates opportunities to de-escalate and unlock value, moving the parties from defensive, “out-of-group” behavior to more constructive, solution-focused “in-group” engagement.[5]

Even where legal rights are clear, outcomes are often driven by behavior rather than doctrine. Lawyers, advisers, executives, trustees, regulators and courts are frequently asked to solve a broad range of disputes involving contracts, governance, ownership, innovation, liability, succession, performance and reputation. Yet even the most sophisticated legal argument or commercial solution can fail when underlying human dynamics are not addressed.[6]

Disputes are rarely just about money or rights. They often involve identity, recognition, control, status, trust and belonging. In IP disputes, for example, parties may be fighting not only over patents, trademarks, copyright, software code, trade secrets or licensing revenue, but over authorship, legacy, market position and reputation. In shareholder disputes, the surface issue may be valuation, while the real conflict concerns exclusion, respect or strategic control. In employment cases, legal claims may conceal grievances about dignity or perceived injustice. These conflicts are shaped by individual personalities, shared cultural frameworks and neurobiological responses to stress.[7]

Understanding these dynamics requires moving beyond purely rational approaches. The TRI-O/S model offers a useful lens, recognizing that behavior and decision-making are shaped by three interacting operating systems – emotional, social and analytical – that can operate at different speeds, levels of awareness and according to different patterns of logic.[8]

Terminology used in this article: “O/S 1” means the human brain’s emotional operating system; “O/S 2” means the brain’s social operating system; “O/S 3” means the brain’s analytical operating system. SCARF refers to Status, Certainty, Autonomy, Relatedness and Fairness, an acronym coined by David Rock.[9] MED-CON refers to a mixed-mode process combining mediation and conciliation, defined below.

The Emotional System (O/S 1): Fast, Instinctive and Protective

The emotional system (O/S 1) includes rapid processes for detecting threat, reward and other salient information, namely information that the brain automatically identifies as important, relevant or requiring immediate attention. Experimental evidence suggests that certain threat-related cues can activate amygdala-centered networks in as little as approximately 70-80 milliseconds before full conscious appraisal, preparing physiological and behavioral responses before slower reflective analysis occurs.[10]

This system is governed by two polarities:

Fear / away (avoid, defend, protect), and
Reward / toward (approach, engage, pursue).

In conflict, perceived threats – such as loss of control, exclusion, disrespect, reputational damage, loss of IP ownership or commercial uncertainty – activate defensive responses that narrow attention and reduce openness to dialogue.[11] These reactions are often triggered by perceived losses of control, respect or certainty, rather than by the legal merits themselves.

This helps explain why parties often overreact to correspondence, become entrenched after procedural skirmishes, or escalate after seemingly minor events. A cease-and-desist letter, termination notice, leaked email or public accusation may trigger O/S 1 emotional responses disproportionate to the objective issue.

Importantly, even fleeting emotional states can have lasting effects on decision-making. Decisions influenced by temporary emotions may persist long after the original stimulus has faded, shaping future judgments and behaviors.[12]

The Social System (O/S 2): Identity, Belonging and Status

Across disputes, parties can shift quickly from a shared problem (“how do we resolve this?”) to competing identities (“us versus them”). The social system (O/S 2) shapes how individuals relate to others, including perceptions of trust, fairness, hierarchy, status, loyalty and belonging. Social cues that are perceived as particularly salient, such as exclusion, hostility, unfairness or loss of status, may likewise be processed rapidly and can activate threat-related responses before deliberate appraisal.[13]

It is structured around a different set of polarities:

In-group (trusted, aligned, empathetic), and
Out-of-group (distant, competitive, threatening).

These dynamics arise across virtually all disputes:

In partnerships: founders versus investors.
In companies: internally (board versus management) or externally (with competitors).
In construction: employer versus contractor.
In employment: management versus employee.
In estates disputes: siblings, trustees, beneficiaries, advisers.

They are central in family disputes. Conflicts often arise when parties shift from a shared family identity to competing factions.[14] This dynamic can be understood simply: Once the other party is perceived as “out-of-group,” cooperation drops and defensive behavior increases.

This system is also closely linked to implicit bias, which influences perception and behavior without conscious awareness.[15] Even well-intentioned individuals may unknowingly reinforce divisions through assumptions based on profession, nationality, age, gender, language, status or organizational role.

Where O/S 2 social patterns become dominant, parties may stop seeing each other as problem-solving counterparts, reduce their ability to act compassionately or with empathy and begin seeing each other simply as adversaries to be defeated.

The Analytical System (O/S 3): Reflexive, Reflective and Resource-Dependent

The analytical system (O/S 3) supports analysis, planning, forecasting and decision-making. This is the system relied upon by lawyers drafting submissions, experts valuing claims, boards assessing risk and judges deciding cases. It can operate through both rapid, experience-based judgment and slower, consciously reflective analysis, depending on the demands of the situation.[16]

By analogy, two broad modes of O/S 3 reasoning can be distinguished. In his book “Thinking, Fast and Slow,” Daniel Kahneman contrasts fast, automatic “System 1” processing with slower, effortful “System 2” processing, while Matthew Lieberman, in his book “Social: Why Our Brains Are Wired to Connect,” distinguishes a reflexive “X-system” from a reflective “C-system.”[17] These frameworks are not equivalent to TRI-O/S, but they provide useful analogies for distinguishing rapid, pattern-based reasoning from slower, consciously controlled analysis.

Reflexive or fast reasoning: rapid, largely automatic judgments based on learned patterns, prior experience and recognition of salient cues. This broadly resembles aspects of Kahneman’s System 1 and Lieberman’s X-system.
Reflective or slow reasoning: more effortful and consciously controlled analysis used to compare evidence, test assumptions, consider alternatives and address unfamiliar problems. This broadly resembles aspects of Kahneman’s System 2 and Lieberman’s C-system.[18]

Unlike O/S 1 and O/S 2, whose rapid responses are driven primarily by emotionally or socially salient cues, rapid O/S 3 reasoning typically reflects learned analytical expertise, pattern recognition and experience. Each mode of thinking has its own strengths, vulnerabilities and characteristic biases.

When a situation cannot be resolved through rapid expertise-based reasoning alone, reflective O/S 3 reasoning generally develops more slowly than emotional, social and reflexive responses. It depends on limited resources such as attention, working memory, time and cognitive capacity. Like all neural activity, it depends on the continuous delivery of glucose and oxygen, whose metabolism supports the energy-intensive signaling required for sustained attention, executive control and complex analysis.[19] Under stress, fatigue or perceived threat, emotionally or socially salient information may capture attention, reducing the cognitive resources available for sustained executive control and analytical reasoning and leaving less capacity for sustained analysis and self-regulation.[20] When information is incomplete, excessive or uncertain, O/S 3 may instead rely on simpler heuristics or “gut feelings” rather than extended reflective analysis.[21] Gerd Gigerenzer argues that such intuitive reasoning is not necessarily inferior: Where a heuristic has a good ecological fit with the environment, particularly under genuine uncertainty, it may be more effective than more complex or data-intensive forms of analysis.[22]

This explains why even highly capable and experienced individuals often struggle to think clearly in conflict situations and may make poor litigation decisions: rejecting sensible settlements, pursuing punitive claims, ignoring downside risk or becoming attached to symbolic points with little commercial value. The issue is often not intelligence, but the interaction of threat, identity, cognitive load and the mode of reasoning being used.[23] Analytical thinking may therefore be constrained, selective or inaccessible at key moments, and apparently irrational behavior may become more understandable when viewed through the interaction of emotional, social, reflexive and reflective modes of thinking.

Social Plasticity and the Dynamics of Escalation

A critical insight from recent research is the concept of social plasticity – the capacity to shift between cooperative and adversarial behavioral patterns.[24]

Neuroscientific evidence suggests that the brain contains competing systems for pro-social (empathic, cooperative) and anti-social (defensive, aggressive) behavior, and that which system is activated depends heavily on context.[25]

This aligns closely with Friedrich Glasl’s nine-stage escalation model, which describes how conflicts progressively evolve from problem-solving disagreements to destructive struggles in which the parties increasingly seek to defeat one another.[26] As escalation progresses:

Perception narrows
Empathy and compassion decrease
Attribution becomes more hostile
The other party is caricatured or dehumanized
Cooperative behavior gives way to competitive or punitive behavior
Constructive analytical dialogue becomes progressively more difficult[27]

These stages can be viewed as shifts between and across the polarities of different operating systems:

Early stages may involve low O/S1 (emotional) and O/S 2 (social) tension, where O/S 3 (analytical) thinking is not affected;
Mid-stages may reflect stronger O/S 1 (emotional) and O/S 2 (social) activation, with heightened threat responses and entrenched group dynamics that start to shape and affect the quality of O/S 3 (analytical) thinking;
Later stages may involve deeply embedded patterns of fear or out-of-group categorization, where O/S 3 reasoning becomes increasingly constrained or biased towards defending established positions, rather than exploring alternatives.[28]

This is common in litigation after failed injunction applications, discovery disputes, aggressive press campaigns or repeated breaches of trust.

Importantly, these patterns are not fixed. Social plasticity means that behavior can shift back towards cooperation if conditions change, creating critical opportunities for intervention.[29] This progression is rarely linear. Parties can move rapidly between stages depending on triggers, which makes timely interventions critical.

A Practical Illustration: Applying TRI-O/S in a Complex Inheritance and Business Dispute

The practical implications of TRI-O/S can be illustrated by the following anonymized example. It involves a dispute involving a successful family-owned business following the death of its founder. The heirs had a strained personal history and competing visions for the future of the company. At the beginning, the only solution envisaged was a sale to a competitor, which would have resulted in a 20-30% loss in value.

O/S 1 (emotional): The first step was to redirect attention away from fear-based reactions (loss of control, rivalry, resentment) towards a shared reward: maximizing value for the next generation. This reframing shifted the discussion from “who wins” to “what outcome benefits the family as a whole.”

O/S 2 (social): Social plasticity was activated through this newly identified sense of belonging and structured interactions, including shared meals and facilitated meetings, where visions for the benefit of the family’s future generations were discussed. These settings helped re-establish a sense of common identity by focusing on shared values, the family’s legacy, and “worst-case” scenarios the parties wished to avoid, particularly the next generation inheriting the conflict.

O/S 3 (analytical): Once emotional and social tensions were reduced, problem-solving based on clearly identified criteria and metrics became possible. The parties identified a way to divide the business into distinct, non-competing directions aligned with each heir’s preferences. This resulted in a perceived increase in value of approximately 20% compared to the original valuation, while avoiding the losses associated with a trade sale.

This example illustrates how addressing emotional and social dynamics first can reduce defensive reactions and create better conditions for both intuitive insight and reflective analysis, making previously inaccessible solutions easier to identify and evaluate.

Personality and Culture: Individual and Collective Patterns

To understand social O/S 2 thinking fully, it is important to distinguish between personality and culture. These factors often interact. What appears as a “difficult personality” may in fact reflect a cultural norm under stress.

Personality reflects individual behavioral tendencies – how a person responds to stress, ambiguity, power and conflict.

Culture reflects shared group patterns – norms, expectations, communication styles and values that shape collective behavior.[30]

Hofstede’s cultural dimensions illustrate how differences in values such as power distance, individualism and uncertainty avoidance influence decision-making.[31] For example:

Power distance affects expectations of authority.
Individualism vs. collectivism shapes negotiation priorities.
Uncertainty avoidance influences tolerance for ambiguity and legal risk.
Long-term orientation affects settlement horizons.

In cross-border or culturally complex disputes, behavior that appears evasive, aggressive, indecisive or irrational to one party may be entirely consistent with another’s cultural logic.[32]

Plasticity and Process Design

Because behavior is context-dependent, process design becomes central. Small changes in environment or interaction can shift parties from:

Threat to safety
Out-group to in-group
Reactivity to reflection
Blame to problem-solving[33]

Examples include:

Sequencing meetings differently
Using joint expert sessions
Separating people from issues
Reframing accusations as interests
Private caucus at key moments
Narrowing agendas
Restoring procedural fairness
Creating face-saving exits.

Rather than relying on persuasion alone, effective practitioners design processes that change how parties experience interaction. For example, sequencing conversations, creating informal interaction spaces or reframing agendas can materially alter outcomes. In other words, conflict dynamics are not just a product of personalities, cultures or history. They are also a product of process design.

SCARF: A Practical Diagnostic Checklist

The SCARF acronym,[34] coined by David Rock, provides a practical way to identify triggers of social threat or reward:

Status
Certainty
Autonomy
Relatedness
Fairness

This applies across dispute types:

Status: founders sidelined, experts ignored, inventors uncredited
Certainty: unclear claims, unstable markets, unpredictable procedure
Autonomy: loss of control over business or settlement choices
Relatedness: distrust between counterparties or teams
Fairness: perceived procedural or substantive injustice

In practice, SCARF can be used diagnostically by asking simple questions:

Who feels undervalued (Status)?
Where is uncertainty driving behavior (Certainty)?
Who feels a loss of control (Autonomy)?
Where is trust lacking (Relatedness)?
What is perceived as unfairness (Fairness)?

Perceived threats to any of these factors can activate defensive responses and escalate conflict.[35] Interventions can then be targeted, rather than applied generically.

The SCARF model provides a useful way of analyzing why the family business dispute described above was able to succeed:

Status was preserved by recognizing each heir’s role both as a family member and as a person capable of generating value.
Certainty increased once the business was not to be sold.
Autonomy was restored through independent control as between the heirs.
Relatedness improved through structured interactions and a shared sense of purpose for the family’s future.
Fairness was enhanced because each party perceived the assets allocated to them as having greater value, avoiding the sense of an imposed compromise.

SCARF therefore offers a simple but powerful diagnostic tool for identifying underlying drivers and guiding interventions.[36]

Bridging Polarities: The Role of MED-CON

Mediation and conciliation are often used interchangeably, as synonyms. Both are forms of negotiation facilitated with the help of an independent, impartial and trusted person; from a neurobiological perspective, they are very different processes:

Mediation is a form of subjective justice where the mediator helps the disputants to understand and work at the level of their needs, interests, concerns and motives, looking to the future and finding solutions that meet them. The mediator is usually a person of neutral social status, whose views (even if acting evaluatively) are only those of one person.
Conciliation is a form of objective justice, where the conciliator is an expert in a given field (e.g., law) and helps the parties to understand the strengths and weaknesses of their positions, and also helps the parties reach a compromise (sometimes making settlement proposals based on what they deem most likely to happen, based on their expertise). The conciliator is usually a person of greater social status (e.g., a retired judge or peer-recognized expert in the field), whose opinions are indicative of what outcomes are likely to occur, rather than the views of only one more human being.

The distinction between mediation and conciliation becomes clearer when viewed through TRI-O/S:

Mediation addresses emotional and relational dynamics (O/S 1 and O/S 2). It primarily engages O/S 1 (constructive emotions) and O/S 2 (pro-social behavior) by reducing threat and rebuilding relationships, helping to shape outcomes in terms of possible “rewards” (e.g., how to meet interests, needs, concerns and motives);
Conciliation addresses structure and valuation by engaging O/S 3 analytical processes, including evidence-based evaluation, probability assessment, decision trees and external expert perspectives to help parties bridge positions and find middle ground.[37]

The MED-CON “mixed-mode” approach combined mediation and conciliation by using two different neutrals (a mediator and a conciliator, working together as a team) to integrate these three patterns of thinking (O/S 1, 2 and 3) simultaneously. In practice, it involves the best of these modes of thinking: It sequences the process so that parties are first helped to reduce threat and rebuild working trust before evaluative input is introduced to test options, valuation assumptions, legal risks and implementation pathways. For example, mediation can be used to stabilize interactions before introducing evaluative input once parties are cognitively ready to engage with it. This enables bridging the polarities between the emotional, social and analytical systems, combining the three operating systems at the same time.

This approach can be especially valuable in:

Family business disputes where wealth preservation is important
Shareholder conflicts involving control plus governance breakdown
Employment disputes involving legal rights plus dignity concerns
Construction disputes involving technical causation plus relational mistrust
IP disputes involving valuation plus wounded inventors.

This flexible approach reflects a tension many mediators experience when acting alone: They may need to move between facilitative and evaluative modes, but doing so can confuse parties.[38] The same person swapping hats may be confusing for the disputants, even if it is clear to the neutral when they are working in a facilitative mediation mode and an evaluative conciliation mode. The recommendation is to use two people to “co-mediate” in these cases, one acting consistently as the mediator and the other as the conciliator.

Implications for Commercial and Civil Practice

These insights suggest a shift in perspective for lawyers, advisers, executives and neutrals. The key implication is not that disputes require more analysis, but that they require better sequencing of emotional, social and analytical interventions:

Disputes are not just technical problems but human systems under stress
Emotional and social dynamics should be addressed first, or alongside substantive analysis, where they are constraining sound judgment
Process design is a critical tool for influencing behavior[39]

Practical interventions may include:

Fostering shared objectives
Ensuring voice and participation
Acknowledging status concerns
Addressing fairness explicitly
Using phased settlement processes.[40]

These interventions directly influence how the brain processes conflict and decision-making.[41]

Conclusion

Commercial and civil disputes are rarely resolved through logic alone. They require an understanding of how people think, feel and relate under pressure.

The TRI-O/S model highlights that effective dispute resolution is not simply about finding the right answer, but about creating the conditions in which parties are able to recognize it. The model shows that emotional and social systems shape both reflexive and reflective reasoning. By recognizing this, parties and advisers can design processes that reduce threat, restore trust, and improve the conditions for sound intuitive and reflective decision-making.[42]

Ultimately, successful outcomes depend not only on the legal merits of the case or the quality of the solution, but on the ability of the parties to engage constructively with one another.[43]

Jeremy Lack is a barrister, lawyer, mediator and arbitrator who focuses on complex cross-border and cross-cultural disputes. His practice includes technology, intellectual property, commercial and trust and estate matters, with a focus on mediation and mixed-mode processes. He is also active in research at the intersection of conflict resolution and neuroscience, including through his work with neuroawareness.com and the development of the TRI-O/S framework.

This article appears in a recent issue of NY Dispute Resolution Lawyer, a publication of the Dispute Resolution Law Section. For more information, please visit https://nysba.org/committees/dispute-resolution-section/.

Endnotes:

[1] Suzanne Lauritzen, The Adviser’s Guide to Culturally Agile Wealth and Ownership Structuring, Int’l. Fam. Off. J., Sept. 2025, at 56–60, https://globelawonline.com/article/860/the-advisers-guide-to-culturally-agile-wealth-and-ownership-structuring.

[2] Jeremy Lack & François Bogacz, The Neurophysiology of ADR and Process Design: A New Approach to Conflict Prevention and Resolution? 14 Cardozo J. Conflict Resol. 33, 33–80 (2012), https://cardozojcr.com/wp-content/uploads/2013/07/Lack_Bogacz.pdf.

[3] David Rock, SCARF: A Brain-Based Model for Collaborating with and Influencing Others, 1 NeuroLeadership J. 1, 1–9 (2008), https://davidrock.net/wp-content/uploads/2016/06/SCARF-NeuroLeadership-Journal.pdf.

[4] Jeremy Lack, The Benefits of MED-CON, a Mixed-Mode Process: Combining Mediation and Conciliation, Alt. High Cost of Litig., Feb. 2025, at 19, 19–23, https://lawtech.ch/wp-content/uploads/2025/02/2025-02-01-The-Benefits-of-MED-CON-a-Mixed-Mode-Process-J.-Lack.pdf.

[5] Olga M. Klimecki, The Plasticity of Social Emotions, 10 Soc. Neuroscience 466, 466–73 (2015), https://doi.org/10.1080/17470919.2015.1087427.

[6] Lauritzen, supra note 1.

[7] Lauritzen, supra note 1; Lack & Bogacz, supra note 2.

[8] Lack & Bogacz, supra note 2.

[9] Rock, supra note 3.

[10] Lack & Bogacz, supra note 2; see also Rock, supra note 3 and Constantino Méndez-Bértolo et al., A Fast Pathway for Fear in Human Amygdala, 19 Nat. Neurosci. 1041, 1041–49 (2016), https://pubmed.ncbi.nlm.nih.gov/27294508/.

[11] Lack & Bogacz, supra note 2; Rock, supra note 3.

[12] Eduardo B. Andrade & Dan Ariely, The Enduring Impact of Transient Emotions on Decision Making, 109 Org. Behav. & Hum. Decision Processes 1, 1–8 (May 2009), https://doi.org/10.1016/j.obhdp.2009.02.003.

[13]]; Lack and. Bogacz, supra note 2 and Rock, supra note 3.

[14] Lauritzen, supra note 1; Lack & Bogacz, supra note 2.

[15] Carol L. Izumi, Implicit Bias and Prejudice in Mediation, 70 SMU L. Rev. 681, 681–94 (2017), https://scholar.smu.edu/smulr/vol70/iss3/6.

[16] Lack & Bogacz, supra note 2.

[17] Daniel Kahneman, Thinking, Fast and Slow (2011); Matthew D. Lieberman, Social: Why Our Brains Are Wired to Connect (2013).

[18] Kahneman, supra note 17; Lieberman, supra note 17.

[19] Lack & Bogacz, supra note 2.

[20] Lack & Bogacz, supra note 2; Rock, supra note 3.

[21] Gigerenzer, Gut Feelings, supra note 17; Gigerenzer, Risk Savvy, supra note 17.

[22] Id.

[23] Lack & Bogacz, supra note 2; Rock, supra note 3.

[24] Klimecki, supra note 5.

[25] Id.

[26] Lack & Bogacz, supra note 2; Friedrich Glasl, Confronting Conflict: A First-Aid Kit for Handling Conflict (rev. ed. 2020).

[27] Lack & Bogacz, supra note 2; Klimecki, supra note 5.

[28] Lack & Bogacz, supra note 2; Rock, supra note 3; Klimecki, supra note 5.

[29] Lack, The Benefits of MED-CON, supra note 4; Klimecki, supra note 5.

[30] Lauritzen, supra note 1; Geert Hofstede, Dimensionalizing Cultures: The Hofstede Model in Context, 2 Online Read. Psychol. & Culture (2011), at 1, https://doi.org/10.9707/2307-0919.1014.

[31] Hofstede, supra note 30.

[32] Lauritzen, supra note 1; Hofstede, supra note 30.

[33] Lack & Bogacz, supra note 2; Lack, supra note 4.

[34] Rock, supra note 3.

[35] Lauritzen, supra note 1, Rock, supra note 3.

[36] Rock, supra note 3.

[37] Lack, The Benefits of MED-CON, supra note 4.

[38] Lack, The Benefits of MED-CON, supra note 4, Lack, A Mindful Approach, supra note 9.

[39] Lauritzen, supra note 1; Lack & Bogacz, supra note 2; Lack, The Benefits of MED-CON, supra note 4.

[40] Lauritzen, supra note 1; Rock, supra note 3; Lack, The Benefits of MED-CON, supra note 4.

[41] Lack & Bogacz, supra note 2; Rock, supra note 3; Klimecki, supra note 5.

[42] Lack &.Bogacz, supra note 2.

[43] Lauritzen, supra note 1; Lack, The Benefits of MED-CON, supra note 4.