When you become involved in a business dispute, whether with another company, a partner or a shareholder, you may fear that litigation is the only way to resolve it. Yet, litigation can be costly and time-consuming. Given these likelihoods, you may want to consider alternatives to taking your dispute to court. By familiarizing yourself with them, you can work to find a method that makes sense for the dispute at hand.
Arbitration
Arbitration is conducted in a similar manner to a trial and is mandated by clause in many business contracts. You and the other party will each provide opening statements, as well as evidence supporting your claims, to the arbitrator. Once the arbitrator hears your case, they will rule on an award.
Two different types of arbitration exist. Most arbitration is binding, which means it is final and is enforceable by a court. Non-binding arbitration ends in a suggested resolution that is only final if you and the other party agree to it.
Mediation
During mediation, you and the other party will work to resolve your conflict with the help of a mediator. Unlike arbitration, mediation does not resemble a traditional trial format. And unlike an arbitrator, a mediator will not make a final ruling on your case. Yet, they will guide you and the other party toward consensus as you discuss your dispute. Keep in mind that mediation does not have to end in agreement. If you and the other party cannot resolve your dispute, you must start over or pursue a different method for working it out.
Negotiation
Negotiation is less formal than both arbitration and mediation. While this may seem appealing, its success will depend on your ability – and the other party’s ability – to approach your dispute in a clear and calm manner. This is because negotiation occurs without the assistance of a third party. You will, however, want to proceed with the guidance of an attorney to ensure any agreement you reach is fair and enforceable.
The high-stakes nature of some business disputes means that they must resolve through litigation. Yet, many disputes can resolve using alternative methods, and it is important to understand if yours is among these. An attorney can help you understand what options make sense for you moving forward.
