Business Law

Many Prefer Alternative Dispute Resolution Over a Lawsuit

Going to court is not the only way to resolve your business disputes. You have a number of other options that can be quicker and less expensive than filing a lawsuit and taking a case to trial. Alternative Dispute Resolution (ADR) is a category of problem solving options that use impartial third parties to help you settle disputes without going to court. Instead of presenting your case to a judge and jury, you sit down at a table and attempt to negotiate a solution that resolves the problem.

Mediation Is a Type of Voluntary ADR

Mediation is a voluntary process that you can use to resolve disputes. If you and the other party to the dispute agree to mediate, you meet with a trained negotiator whose job it is to help you work through your differences. You typically have the option of accepting or rejecting any agreement reached through mediation. If you can't reach an agreement, going to court is still an option.

Arbitration Is a Type of Formal ADR

Arbitration is a less formal version of a court hearing. You get to present your case to one or more independent arbitrators under streamlined trial procedures. The arbitrators listen to both sides of the story and issue a written decision. Arbitration decisions are typically binding. Federal and state laws make arbitration decisions and awards enforceable in much the same way as a court order or judgment.

ADR Offers Multiple Advantages

ADR is quicker and less expensive than litigation. Most court systems are backlogged. It can take months or even years before a case is heard. The cost of paying a lawyer for so long can hurt your business. Typically, parties do not want to conduct further business together until the problem is resolved. ADR can usually be conducted within weeks, so you can get back to your business. Most important, ADR negotiations and settlements are confidential, unlike trials, which are part of the public record. If you agree to some kinds of ADR, however, you forfeit your day in court.

ADR Can Be Required by Contract

Business contracts often include terms that require contract disputes to be taken to arbitration. If your contracts require arbitration, you can't use the court system to litigate contract disputes. Many businesses prefer arbitration over litigation because it removes the possibility of an outrageous jury award and concludes the matter promptly and privately.

A Business Lawyer Can Help

The law surrounding alternative dispute resolution is complicated. Plus, the facts of each case are unique. This article provides a brief, general introduction to the topic. For more detailed, specific information, please contact a business lawyer.

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