When a business dispute arises, owners typically want to resolve it quickly, and they don’t want to spend too much money to do so. This can seem impossible to do if your case goes to court, and indeed litigation can be the most time-consuming and expensive way to resolve a dispute.
Because of this, many business owners prefer alternatives to litigation. In California, there are numerous alternatives that can be worth considering.
Mediation and arbitration are two of the most common forms of alternative dispute resolution, or ADR. While they both allow parties to keep cases out of court, they are distinctly different methods.
Rather than putting their faith in the decision of a judge, jury or arbitrator, mediation is an informal process in which the parties retain control of their own destiny by attempting to reach a mutual resolution with the assistance of a retired judge or attorney specializing in the area of law involved in the dispute. While the mediator aids with communication and unbiased case evaluation, the parties will ultimately reach an agreement (or not) themselves. Mediation may not be a realistic option for highly contentious or complex cases, or cases in which one party feels so strongly about their case that they are unwilling to compromise in any manner.
Arbitration also involves a neutral third party – an arbitrator – but here the arbitrator acts as a judge and conducts the hearing similar to a judge in court. The arbitrator makes a final decision (without the use of a jury) whose decision is usually final absent vert limited exceptions. While it is quite similar to a court trial, theoretically it moves the case toward resolution much more quickly and is typically more accommodating to everyone’s schedule. On the flipside, arbitrations can be very expensive and usually preclude an appeal process.
These and other forms of ADR, which include settlement conferences and neutral evaluation, give disputing parties the opportunity to settle an issue more quickly. Other benefits to ADR include preservation of relationships and confidentiality, which can be important priorities for business owners.
It is important to note that sometimes litigation is unavoidable or necessary. As such, it is important to discuss ADR options as well as the possibility of litigation with an attorney experienced in all areas. With legal counsel, you can pursue the desired outcome and avoid any costly or unnecessary missteps.