Mediation and Arbitration: Their Role in Business Litigation
Disputes are essentially inevitable when you’re in business for long enough, but the outcome can depend heavily on how you approach your disputes. Standard business litigation can be a powerful tool, but in some cases, it can be time-consuming and permanently damaging to your business relationships. In some cases, alternative dispute resolution methods—including mediation and arbitration—are better options. If you’re struggling with a business dispute, it’s time to talk to the team at the Law Offices of Robin D. Perry & Associates. Consulting a business advising attorney in Long Beach can help you determine the most effective strategy for resolving your dispute. Our Southern California team can help you navigate the best path forward. Call us at 562-216-2944 to set up a consultation now.
Some business owners have minimal interest in alternative dispute resolution methods, wanting instead to go directly to litigation. Not only is this not always the best option, it may not even be legally possible. A growing number of business contracts include clauses requiring alternative dispute resolution methods be attempted before either party moves on to litigation. That’s why it’s important to understand how these different methods work and what their potential outcomes are. A Long Beach business advising law firm can provide the expertise needed to navigate these clauses and achieve a favorable resolution.
Mediation in Business Litigation
Mediation is a collaborative process, making it a popular option for business disputes in which you hope to maintain the business relationship. Rather than approaching the dispute from an adversarial approach, the goal is to compromise with the other party to come to an agreement that benefits both parties. The parties agree on a mediator, who must serve as a neutral party with no vested interest in the outcome. The mediator meets with the parties separately and together, striving to learn more about both parties’ concerns and ideal outcomes. The mediator may help the parties find common ground, overcome misunderstandings, and explore different outcomes. The mediator does not make any final decisions, nor are their recommendations legally binding. Both parties must agree before any agreements are written into legally binding documents.
The Role of Arbitration
Arbitration is less intensive than litigation, but more formal than mediation. One of the main benefits of arbitration is that it’s more private than litigation, which is especially beneficial for companies with a significant public profile for whom legal disputes could weaken their value.
After you choose an arbitrator, they hear both sides’ evidence, testimony, and legal arguments. In that way, it’s somewhat similar to a trial. After the arbitrator hears both sides, they make a binding decision that both parties must abide by. Consulting a Long Beach business advising lawyer can help you understand the nuances of arbitration and ensure you are well-prepared for the process.
Comparing These Two Alternative Options
While both of these methods are alternatives to traditional business litigation, they differ significantly in nearly every important way. Mediation is somewhat more flexible, allowing both parties the freedom to walk away at any option or refuse a suggestion made by the mediator. Arbitration is much more restrictive, as the arbitrator has final say over the ruling made. However, both options are private, making them a more favorable option than litigation for many companies.
One similarity between mediation and arbitration is the issue of cost. Business litigation can become very expensive very quickly, especially in complex business disputes where both parties have a lot at stake. Arbitration and mediation, in comparison, are considerably less expensive. Consulting a business advising lawyer in Long Beach can help you determine the most cost-effective and suitable method for your specific situation.
Working Alternative Dispute Resolution Methods Into Your Contracts
Perhaps you’re thinking about how alternative dispute methods could benefit your business long-term. In an effort to keep legal expenses down and avoid issues becoming public, many businesses incorporate ADR clauses into their contracts. If you do this, you’ll need to specify that any legal dispute arising from your contract must be handled by mediation or arbitration. Be specific about the rules governing the process, how a mediator or arbitrator will be selected, and other details of the proceedings. Ensure that you work with an experienced business advising attorney for this process, as clauses that are too unfair to the other party may not be legally enforceable. For example, forced arbitration clauses in employment contracts have been in and out of California courtrooms in recent months, although a recent ruling appears to be the final word on the matter.
Prepare for Business Litigation With the Law Offices of Robin D. Perry & Associates
Having the right legal team by your side during business disputes can help you feel confident and optimistic about the outcome. Let us help; the business advising law firm of Robin D. Perry & Associates is committed to protecting your business. Call us at 562-216-2944 or get in touch online to get started.
Attorney Robin D. Perry has been part of the Long Beach Community for over 25 years handling business litigation, employment litigation and advising, criminal defense, personal injury and code enforcement defense for businesses.
