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Alternative dispute resolution versus litigation

On Behalf of | Feb 23, 2022 | Mediation & Arbitration

Business owners may use different legal methods, such as ADR techniques, to resolve issues with customers or stakeholders. Before considering a course of action, you may review an existing contract to see if the terms specify how parties may seek relief.

If an agreement states that parties must resolve disputes through arbitration, you may not file a lawsuit in court. Rather than a judge and jury, arbitration relies upon an experienced arbitrator. The arbitrator reviews each party’s facts and circumstances and then decides an outcome. To begin the process, you may file an arbitration demand and notify the other party of your claim.

Arbitration differs from mediation

The Superior Court of California, County of San Diego’s website notes contract terms may specify binding or non-binding arbitration. With binding arbitration, parties waive rights to a trial and agree that the arbitrator’s decision is final. Non-binding arbitration, however, allows either party to request a trial if the arbitrator’s outcome is not satisfying.

If a contract allows for resolving issues through a mediator, you may choose one to negotiate a resolution. A mediator works with each participant to resolve an issue and reach a mutually agreeable outcome.

Litigation may tie up resources and become a lengthy process

As noted by the American Bar Association, the expenses associated with litigation may become overly burdensome when compared to the hoped-for benefit. Court-based litigation could also bring delays and tie up funds and resources. A trial may jeopardize relationships.

If you wish to file a complaint to resolve an issue, your contract may state whether it could proceed through arbitration, mediation or litigation. Arbitration and mediation offer a personalized and private approach to addressing concerns. Litigation may uncover hidden problems that led to the dispute, which then generally become a public record.