On behalf of Kadish & Associates Law Group on Wednesday, February 26, 2020.
As an Arizona business owner, you may already understand how expensive and disruptive it can be to deal with a lawsuit, whether you are seeking justice or someone has filed a claim against your company. Litigation may mean months of preparation, discovery, delays and motions before the trial even begins. Your business may suffer as you divert employees to gathering documents and drain your resources preparing testimony.
Many business owners find they can avoid these burdens by using alternative forms of dispute resolution to address their conflicts. Whether you are facing a legal dispute with an employee, a vendor, a client or some other entity, you may find a more peaceful way of coming to terms by employing mediation or arbitration. However, which method is more appropriate for your situation?
Comparing mediation and arbitration
The goal of alternative dispute resolution is to guide you and your opponent as you examine the conflict, find the points on which you can agree and negotiate the issues where you disagree. The processes are different for mediation and arbitration. For example, if you choose mediation, the following will be true:
- A trained mediator will usually meet individually with each party before discussions begin.
- The mediator’s role is to facilitate your negotiations but remain neutral.
- The mediator will ask questions and make suggestions, but ultimately, you and the other party make the decisions.
- The process is informal, and either party may withdraw at any time.
While mediation has some similarities to arbitration, they are different methods with different outcomes. You may expect any of the following if you use arbitration to resolve your business dispute:
- The process of arbitration is similar to a trial but does not occur in court, and no witnesses testify.
- The trained neutral party, the arbitrator, will listen to both sides of the dispute and may request additional documentation.
- Instead of discussing your issues with your opponent, you present them to the arbitrator, who makes a decision that is usually binding by law.
- Unlike mediation, neither party may withdraw from arbitration once they have agreed to use it to resolve their conflict.
Deciding which method of dispute resolution is best for your situation may involve considering several factors. For example, your contract with the other party may require you to use arbitration, or the issue in question may need a more creative solution than arbitration can offer. By discussing the matter with your attorney, you will learn more about these two methods and receive valuable advice about which may benefit your business.