Business owners are aware that if they have a dispute, they may have to go to court to resolve it. However, mediation and arbitration are two forms of alternative dispute resolution that business owners may want to consider instead.
In a mediation, an objective third party called a mediator meets with each party and helps them resolve their dispute. The mediator does not make a decision for the parties, however he or she can help facilitate communication between them. The parties’ agreement must be voluntary, meaning that the mediator will not impose a settlement on them.
One of the primary advantages of mediation is that it is private and confidential. It can also help the parties help avoid litigation, which can be time consuming, expensive and may publicize the dispute. It may also help the parties preserve a positive, ongoing business relationship because each has control over the outcome.
If the parties cannot come to an agreement, they still have the option to go to court.
In an arbitration, information is submitted to an impartial decision maker and the outcome is binding on the parties. Each party will have an opportunity to present their position. The arbitrator may ask them to provide documentation, which he or she will review and then will submit an opinion. Unlike mediation, once the proceedings begin the parties may not be able to withdraw.
If a business owner has questions about alternative dispute resolution, an experienced attorney can help them decide which option is right for them.