When your business faces a dispute, the thought of the time, cost and resources to be spent on finding a resolution can be daunting. Whether due to a breach of contract, disagreement among partners or shareholders or more, a commercial dispute may benefit from a resolution decided on outside of traditional litigation.
Alternative dispute resolution methods of mediation and arbitration are an increasingly common way to resolve disputes for companies based in Chicago and across the country. While some contracts may require that the parties first attempt an alternative dispute resolution technique, in many cases, coming to a resolution in a more amicable setting can benefit your business in several ways.
What is alternative dispute resolution?
Two of the most common alternative dispute resolution (ADR) methods include mediation and arbitration. In mediation, the two parties work with a neutral, third-party mediator who attempts to facilitate a workable solution. In arbitration, the two parties also work with a neutral individual known as the arbitrator in a more formal process. Unlike mediation, the arbitrator has the authority to make a binding decision.
Benefits of attempting ADR techniques
There are many benefits to attempting mediation or arbitration as an alternative to litigation. These can include:
- Saving money. In many cases, both mediation and arbitration can be less expensive than litigation as they avoid a potentially costly trial.
- Resolving the dispute quicker. ADR methods can result in a quicker decision by allowing for more flexible scheduling without substantial waiting periods.
- Finding a more creative solution. Mediation or arbitration may result in a more creative yet workable resolution that benefits the needs of both parties.
- Allowing for more input. In both mediation and arbitration, both parties have input in choosing the neutral third party and may participate more actively.
- Maintaining confidentiality. While courtroom dispute records are made public, mediation or arbitration processes and results remain private.
- Preserving the business relationship. Courtroom disputes can enhance bitter feelings while ADR methods may allow both parties to continue the relationship.
In some cases, mediation or arbitration may not be in the best interests of your business. Despite the many benefits of both ADR methods, you may prefer the binding decision of a judge and jury, a public hearing, a formal discovery or evidence process and more. Your attorney can assist in determining your options to find a resolution and advising on your best interests.