Business owners want to avoid disputes as often as possible, for many reasons. The possibility of litigation is one of the major ones.
But do all business disputes have to go to litigation, or is it possible to avoid taking a case to court?
Arbitration as an alternative
FINRA offers two alternative options for business disputes outside of litigation: arbitration and mediation. It is possible to opt for one of these, or another method of resolution, and avoid the court entirely.
Arbitration is the most similar to litigation, and an arbitrator actually has many of the same powers as a judge. They listen to all parties present their arguments and evidence and make a ruling based on this. All parties must legally abide by the ruling.
Opting for mediation
On the other hand, mediation is a more open-ended process where the ultimate outcome rests on the shoulders of the involved parties. A mediator cannot make decisions for them and instead offers advice and opinions. They may also step in to de-escalate arguments or ensure that everyone has their chance to speak.
Litigation should remain a last resort option due to the time and money that it costs to engage in a court case. On top of that, litigation does not protect anyone’s information, as court cases get recorded in public files that anyone can access in the future.
In order to preserve money, time, business ties and privacy, it is best to look into alternative methods of dispute resolution in the event of a disagreement among business partners.