Disputes in business are as common as contracts. Any disagreement about the direction of a company or the interaction between businesses can send you into a courtroom. However, one way to avoid court is to pursue alternative dispute resolution methods. There are several that we’ve worked with, but they aren’t always appropriate for your situation.
Let’s look a little more closely at each one to explain potential benefits and drawbacks:
Negotiation
Negotiation is a natural part of each and every dispute. As part of the litigation process, you will likely meet with the other side frequently to try to resolve things.
- Pros: It provides more direct control of the proceedings. Successful negotiation is cheaper than most other resolution methods.
- Cons: Power imbalances between parties can lead to unfair outcomes, negotiation can end with a stalemate easily
Negotiation is often most appropriate for motivated parties who are more or less equal in power.
Mediation
Mediation could be considered a “guided” negotiation, with a neutral third party hearing all sides and providing a unique solution to the issue.
- Pros: Inherently more collaborative than litigation, completely confidential as it is a private resolution method, seen as a better way to preserve relationships.
- Cons: Mediation is not binding and requires both sides to be willing to accept the mediator’s decision.
Mediation works best for parties who are not on equal footing and who have significant reasons to distrust the process but are motivated to have a more amicable process.
Arbitration
Arbitration is like mediation with negotiations guided by a neutral third party, but the participants sign an agreement to uphold whatever the arbitrator decides.
- Pros: Binding decisions mean faster resolutions and, as it is a private method, all discussions are confidential.
- Cons: There is a limited opportunity to appeal if you do not like the outcome and it is much more formal and less flexible than mediation.
Arbitration is a proven way to solve concerns, and it is an ideal choice for parties who must reach a resolution quickly and quietly.
Minitrials
Minitrials are private trials, held by a private judge, which can allow parties to get a realistic view of the outcome of their case.
- Pro: Focused process and structures allow for specific discussion of main problems, it reveals information about the entirety of the case and is a controlled way to present the case informatively.
- Cons: It is less expensive than going to trial if it is successful, but its success is far from guaranteed. Some may see a minitrial as a “training run” for a full trial, disclosing strategies and witnesses.
A minitrial is not appropriate for most situations and is often only for parties with the time and resources to attempt a larger process.
Only you can make the right choice
Whatever alternative dispute resolution method you choose will be up to you and the party you are in dispute with. We can advise you on the options and represent you in the proceedings, but how you move forward must be your decision.