Alternative dispute resolution can help your business

What is the purpose of a trial? In other words, why do individuals and entities litigate matters in the court system? Many people would answer that the purpose of a trial is to find the truth. While the truth is certainly important in a trial, finding it, according to the U.S. Constitution, is not the underlying reason for a trial. Rather, the Constitution tasks federal courts with resolving cases and controversies; courts are empowered to settle actual disputes between real parties. While some state courts may issue purely advisory opinions, in the vast majority of state court cases, dispute resolution remains the heart of litigation.

While invoking the power of the courts is an enforceable, powerful way to resolve a dispute, it is important to remember that it is not the only way. Alternative dispute resolution can be productive in resolving many types of disputes outside of the courtroom. While, in one form or another, alternative dispute resolution may help settle almost any type of case or controversy, it can be of particular value in business and commercial law.

Which type of alternative dispute resolution may be a good option for your business?

Business disputes arise in a variety of ways. There could be an issue of trademark or other intellectual property infringement. A contract could have been breached. Or, perhaps a conflict has taken root in the very structure of the business itself in the form of a shareholder or partnership dispute.

Business litigation is one way to resolve these types of disputes. However, litigation can be expensive, time consuming, and logistically challenging. Pursuing other alternatives may be the prudent course for a business.

Negotiation is one of the most straightforward forms of alternative dispute resolution. Often, all it takes is an open line of communication to come to a reasonable middle ground considering the relative strengths of each side's respective legal arguments.

Still, sometimes a more structured format is needed to help advance a resolution. Mediation or arbitration can often meet this need while achieving significant time, energy and cost savings over litigation. In either process, the parties are each still represented by a lawyer who will advance their interests. But, there are significant differences between mediation and arbitration.

In mediation, a neutral mediator helps the parties come to a resolution that is mutually acceptable. The mediator does not impose a resolution, but helps the parties hammer out a value-building solution. Mediation could be thought of as a form of coached negotiation.

Arbitration is more similar to a trial. Evidence and arguments are presented to a neutral arbitrator who makes a decision that resolves the dispute. Although it mirrors the format of a trial, arbitration can be much cheaper and quicker as the parties do not have to adhere to the full spectrum of the formal rules of evidence. Arbitration can be binding, meaning the arbitrator's decision is final, or non-binding, meaning that a party unsatisfied with the arbitrator's decision can still pursue litigation.

Contact a business and commercial law attorney for more information

Litigation can always be reserved as a last resort in resolving your business dispute. But alternative dispute resolution may be a faster, cheaper way to solve the problem. Learn more about what alternative dispute resolution can do for your business from an experienced business and commercial law attorney.