As a business owner, you will run into disputes sooner or later. It is the nature of doing business with other parties. When you run into such situations, it is important to know how you want to handle it.
You do not need to turn to litigation for every situation. In fact, there are alternate dispute resolution methods that you may find much more suited to your situation.
Arbitration versus litigation
FINRA looks into alternate forms of dispute resolution. The two biggest ones are arbitration and mediation. Arbitration holds more similarities to litigation. An arbitrator covers the role that a judge would in a traditional court case. They listen to all parties present their arguments. Based on the hearing, the arbitrator makes a decision. This decision is legally binding for all parties.
Unlike litigation, it does not involve a lengthy court battle. This allows all parties to save time and money. It is helpful if you are working on a tight deadline and need to settle the matter as soon as possible.
Mediation versus arbitration
Mediation is even less restrictive than arbitration. First, a mediator holds no legal power when it comes to decision making. They are not here to tell you what to do. They just guide the conversation and ensure everyone has a chance to speak. They also make suggestions, but these are not binding in the way an arbitrator’s decision is.
What you choose depends on your unique situation. For tougher disputes, you may want to lean toward arbitration. Otherwise, mediation could be the exact solution you are looking for.