Arbitration, Mediation, and Litigation: Which is Right for You?
August 2, 2023
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As a business owner, issues will arise, and you must familiarize yourself with dispute resolution. Whether you are protecting yourself from a supplier or if you are facing legal problems with one of your clients. Dispute resolution can be long and tedious; in this article, we will cover your options to help you decide which process is right for you and your business.
Litigation: The Long and Costly Road To Resolve Disputes
We will begin with the option you may think is your only option, litigation, the most formal and traditional method of resolving disputes. With this option, you will go through the traditional court systems, you and the defendant will have a lawyer, and you will present the evidence and case to a judge. Ultimately, the judge will decide the case based on past rulings or requirements in that industry.
Receiving a hearing or trial through a traditional small claims court is often very difficult. Courts are so backed up with cases that, at times, it can take years to get a court date. Also, cases within a court become public records, and most companies do not want such records to be visible to the public.
Out of our list of options, litigation is by far the slowest, most inconvenient, and most costly option for solving disputes.
Mediation: A Non-Binding Settlement
With mediation, all parties can be remote and happen in real time. Rather than having a judge decide your case, with mediation, you have a unbias third party (aka mediator) who hears out both sides of the dispute. This cuts the cost of going to a physical courtroom and is very cost-effective.
Within the mediation process, you and your defendant present and upload your evidence and documents that support your case. The mediator will then use this information for negotiations; however, the outcome of mediation must be agreed upon by both parties, and any resolution is non-binding.
While mediation may be affordable and take less time than litigation, you may still be left with the uncertainty of the implementation of resolution because, despite the mediation, if a solution is not reached, you will not have any legally binding judgment. Instead, you will have a settlement agreement that may result in additional disputes.
Arbitration: A Great Intermediate Solution
Arbitration is similar to mediation in that a neutral third party reviews the uploaded documents, and hearings are remote and may happen in real-time; however, this judgment (aka award) is fully enforceable. If necessary, you can take this award to court so the court can issue a garnishment order to withdraw payments from the defendants’ paychecks and bake accounts or file abstracts. Once the award has been given, it’ll be fully enforceable with the total weight of the legal system behind it.
Conclusion: Understanding Your Options
Every case is unique and requires a particular approach to find an efficient favorable outcome. There are several reasons why arbitration or mediation should be used over traditional small claims courts; arbitration or mediation may be the fastest and most cost-effective solution.
Contact Rapid Ruling today if you are considering arbitration or mediation, or begin your arbitration process by visiting our eFile portal.
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Arbitration is widely used to resolve disputes outside of traditional courtrooms. While it offers speed and confidentiality, parties often wonder if an arbitrator’s award can ever be overturned. Understanding the legal framework, judicial review standards, and practical challenges is essential for anyone
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