How Can Mediation or Arbitration Be Used to Resolve Business Disputes?

 Posted on February 18, 2022 in Business Law

There are many situations where businesses may become involved in legal disputes. These disputes may involve claims that a business is owed money by another person or company, that another organization has used trade secrets or proprietary information to engage in unfair competition, that the business or another party has failed to follow the terms of a contract, or that a business has engaged in discrimination or other unfair treatment of employees. While disputes may be resolved through business litigation, the process of filing and answering a lawsuit and conducting a trial in court can be very lengthy and expensive. In some cases, it may be more beneficial for both parties to use other methods to resolve their disputes, including mediation or arbitration.

Mediation Vs. Arbitration

Resolving disputes outside of formal legal proceedings in court can often be a more effective solution. In addition to saving time and money, the solutions reached using alternative dispute resolution may encourage cooperation between the parties, allowing them both to move forward successfully and continue working together in some cases. The specific procedures followed during alternative dispute resolution will depend on how well the parties will be able to work together and the amount of assistance they will need to resolve the outstanding issues.

Mediation may be the preferred option if the parties are willing to cooperate and compromise. In these cases, the parties will work with a neutral mediator who will help them discuss their issues and determine solutions that they will both be satisfied with. The mediator will not make any decisions, but they may offer suggestions and encourage each party to make concessions. The goal will be to create a workable settlement that will meet each party’s needs going forward. The settlement will not be binding unless both parties are in full agreement on how all outstanding issues will be resolved.

In cases where parties may be unable to work together and need someone else to make the final decisions, arbitration may be a good option. This process will be similar to a trial, but it is much less formal. Each party will present arguments to an arbitrator, who may also ask clarifying questions and review evidence. A single arbitrator may hear a case, or a panel of multiple arbitrators may be used in some situations. After reviewing the arguments and information presented, the arbitrator will make a decision. Rather than deciding solely in favor of one party, an arbitrator will often look to craft solutions that are as beneficial as possible to both parties. Most of the time, parties will agree that arbitration will be binding, and they will be required to follow the arbitrator’s decisions. However, there are some cases where arbitration may be non-binding, and if either party is unhappy with the outcome, they may pursue further legal action.

Contact Our Oakland Park Business Dispute Resolution Lawyer

As you determine the best ways to resolve disputes that affect your business, you may consider arbitration or mediation. In some cases, these forms of dispute resolution may be required based on the terms of a business contract. The Elliot Legal Group, P.A. can help you understand your options in these situations, and we can provide you with legal representation to help you resolve disputes effectively. Contact our Plantation business law attorney at 754-332-2101 to get the legal help you need.

Sources:

https://hbr.org/1990/01/five-ways-to-keep-disputes-out-of-court

https://www.thebalancesmb.com/resolve-business-disputes-with-arbitration-398748