Mediation and Arbitration

Mediation and Arbitration

Mediation and Arbitration

As a business owner, it should be considered that at some point you will be part of a legal dispute in regards to business operations. There are so many moving parts that may ignite a legal dispute between you, clients, contractors, vendors, and other business owners. The more intricate a dispute becomes, the more you are likely to seek legal help to find a resolution. But litigation can be a time consuming, stressful, costly endeavour that may not result in reimbursement after trial. However, litigation may be the only option in order to fully flex your legal rights.

The basic flow of litigation starts with a party filing a claim, procuring evidential issues and other crucial matters, and then presenting the claim to a jury at trial. The jury then decides what is fair in the outcome and that does not always mean the plaintiff will gain all that was expected. The plaintiff may not receive any of the damages they were seeking but may also incur the expense from the litigation. Some of the litigation costs would be attorney fees, filing fees, and other court costs which can become very expensive. The defendant would also be paying these litigation fees and possibly have to pay out the damages the other party is demanding. Both parties are at risk of paying the attorney fees of the opposing party depending on who wins the case.

Sometimes, going to trial is the only option if a defendant makes no settlement offer or is unwilling to negotiate. Another extreme example would be if the plaintiff is making a claim that harms the reputation of the defendant. Then they would definitely have to take these cases to trial. But there is an option to negotiate a possible settlement that can save both parties the costs and time of litigation. Mediation and arbitration are methods in which clients can settle their claims faster but usually both parties will not receive what they fully sought. So neither party may be fully satisfied.

As much as the involved parties are free to negotiate their own settlements, it is advisable to use the assistance of a neutral third-party (the mediator) to attempt negotiating an agreeable compromise. SInce unnecessary trial dates will be omitted due to mediation, the process moves along faster. Also, no agreement or court orders can be forced onto either party during the mediation process.

Arbitration is more formal. Both parties will give their evidence and testimony to the arbitrator. Then the arbitrator will make findings about the case and when both parties can agree to settle, the arbitrator’s decision is binding. If a party wants to appeal the arbitrator’s decision, then they must have legal grounds to appeal it in court.

Consult an attorney who is experienced in business litigation to find which venue is right for you. Time, money, and sufficient evidence is necessary to pursue a claim. Always seek advice of a professional to discuss your concerns and expectation.


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