Will mediation or arbitration resolve your business dispute?

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Business disputes can disrupt your productivity, staff morale and your company’s reputation, not to mention your bottom line. Resolving disputes as quickly and peacefully as possible is in your best interests, and this may mean staying out of the courtroom, where it is easy to lose control of the situation. Whether your dispute involves an employee, client, vendor or rival business, you certainly want to explore every option for reaching a satisfying outcome as efficiently as possible.

Have you considered alternative dispute resolution? For many business owners, ADR methods, particularly mediation and arbitration, are so valuable that they include them in their contracts as requirements in lieu of litigation. If you are considering mediation or arbitration, it would behoove you to understand how each method works.

Arbitration is similar to litigation

If you prefer to have a neutral third party deciding the outcome of your case but do not want to go to trial, arbitration may be a good option. In arbitration, you and the other party each present the facts of your case to an arbitrator, who examines the evidence and reaches a binding decision.

Typically, there are no witnesses, so you should be prepared to present your side thoroughly and succinctly. Additionally, the arbitrator has some leniency with the kinds and amounts of evidence he or she accepts. Once you begin the arbitration process, you usually have to see it through to the end.

Mediation is less formal

Unlike arbitration or litigation, no third party makes a ruling on the issues of your case in mediation. Instead, you and the other party strive to find common ground and resolve any misunderstandings. If there are decisions to make, you and the other party negotiate those outcomes and reach your own conclusions. The mediator merely facilitates these discussions to keep them on track and make suggestions for you to consider.

At the end of mediation, you may have an agreement, which will be binding, or you may simply have a better understanding of your opponent’s side. Unlike arbitration, however, if you are unsatisfied with the outcome of mediation, you may opt to pursue a resolution in court after all.

Overall benefits

Many business owners prefer one of these types of ADR because they are not a matter of public record like a trial would be. They can also be effective and less expensive methods of preventing misunderstandings from escalating to the point of lawsuits.

However, only you and your legal advisor can decide if your situation is better suited for arbitration, mediation or litigation for reaching the resolution that best protects your interests.