There are multiple ways to settle a business dispute. The most well-known way is traditional litigation, but this is not the only option. Many businesses opt for either mediation or arbitration when faced with disputes.
In many cases, mediation and arbitration can save time, money and relationships. According to FindLaw, mediation is a non-binding guided conversation about the dispute, while arbitration has a more similar feel to litigation.
The benefits of mediation
Mediation is a very cost-effective way to try and work out your differences with another party. Essentially, it involves an appointed mediator who will then guide the conversation about the dispute. Mediation can help you and the disputing party come to an amicable agreement, potentially without involving the law directly at all.
Mediation is usually a non-binding situation. This means that if the conversation goes nowhere or if one party decides they are not happy with the solution later on, the issue may still end with litigation.
The benefits of arbitration
Arbitration works more like litigation. Typically, there is a panel of 3 arbitrators. One party chooses one arbitrator, the second party the second and the third is usually mutually agreed upon. Both parties will present their sides of the case, and then arbitrators will speak and decide a verdict.
Arbitration is usually legally binding, which leaves no room for future litigation. In some cases, it is more difficult to overturn an arbitration case as compared to a litigated one.
When dealing with business disputes, make sure to consider all of your options for resolving the problem. Mediation and arbitration can save a lot of worries.