When you are facing a business dispute, it is important to consider your options for a cost-effective and timely resolution. When businesses are engaged in disputes with one another—particularly when those businesses are located in different areas of the country—forms of alternative dispute resolution (ADR) can be particularly useful. By using ADR, you can avoid costly litigation, and you may be able to avoid multiple trips to another region of the country for court hearings. To be sure, you do not want to spend money on multiple trips for court hearings when you could resolve your business dispute quickly and efficiently. At the same time, employing methods of alternative dispute resolution can allow businesses to avoid complications concerning jurisdiction and choice of law matters.
Mediation and arbitration are two commonly used forms of alternative dispute resolution under California law. Our experienced business attorney can help you understand the benefits and limitations of each type of ADR.
Mediation to Resolve a Business Dispute
Mediation is a form of ADR that requires the disputing parties to engage in communication with one another, with the aim of reaching a resolution to their dispute. In mediation, you meet with the other party and a neutral third party (the mediator). Your attorney, as well as the other party’s attorney, can also be present.
Mediation cannot be compelled, both sides must consent to mediation. Mediation is much different from a court hearing in which a judge hears both sides of a dispute and makes a ruling or decision. In mediation, the mediator’s job is to facilitate communication between the parties. The mediator does not issue a decision about the dispute. If you cannot reach an agreement with the other party, then your case can move onto arbitration or litigation. If you can reach a decision, then you can enter into a formal agreement with the other party to officially resolve the dispute.
There are both benefits and limitations to mediation. An obvious benefit is that the process is much faster and less expensive than litigation. You may need to attend mediation only once before reaching an agreement. Another benefit is that the discussions during mediation are confidential. As such, any confidential matters pertaining to your business will not become public record. Nor can the statements made and documents presented through mediation be used in a subsequent arbitration or litigation. Finally, mediation can allow you to play a key role in resolving your own dispute, and it may improve communication between you and the business with which you had a dispute. The major limitation of mediation is that you cannot compel the other side to produce evidence you may need to prove your claim. Also, if you cannot reach an agreement, the mediation may not be a good use of your time or money.
Using Arbitration for Disputes Between Businesses
Many businesses rely on arbitration to resolve disputes with customers, employees, and vendors, but arbitration can also allow you to resolve a dispute with another business.
Like mediation, the key benefits of arbitration are that it is quicker than litigation and more cost-effective. Unlike mediation, an arbitrator—a neutral third party (arbitrator(s))—hears the dispute and can issue a binding decision. Unlike mediation, arbitration can be compelled if there is a signed written agreement between the parties to arbitration. One of the key limitations of arbitration. If you don’t like the outcome, your options for appeal are much more limited than they might be if you had chosen litigation.
Seek Advice from our Fremont Business Lawyer
If you need assistance resolving a business dispute, our Fremont business law attorney can help. We serve businesses in Fremont, Hayward, Union City, Milpitas, and Newark, CA. Contact the Law Firm of Lynnette Ariathurai online today or call us at 510-794-9290 for more information.