Disputes between business owners, between executives and shareholders or between employees and employers often require litigation before they can be resolved. The parties rely on a judge to make sense of the situation and resolve their conflicts.
Unfortunately, litigation can be unpredictable and expensive. It can also damage the working relationship between the parties to a point where continuing to do business together could be impossible.
Alternative dispute resolution (ADR) can be a viable alternative for those hoping to resolve disagreements related to business operations.
How can ADR help?
ADR sessions often occur while litigation is still pending. The parties may agree to sit down to mediate their disagreements. Mediation involves working with a neutral third party to try to compromise and settle disputes.
Parties may also agree to attend arbitration. Arbitration is closer to the litigation process, with both sides presenting evidence and an arbitrator eventually ruling on what they believe is fair or appropriate. Both mediation and arbitration can offer an opportunity to settle matters privately.
Mediation typically ends when the parties sign an agreement, while arbitration depends more on the assessment of the arbitrator. If the arbitration process is not binding, the arbitrator’s determination on the matter might simply be a starting point for continued negotiations.
ADR can sometimes be necessary due to the terms of a contract. Even when it is not mandatory, ADR can be a way to save time and money while limiting the damage that a conflict does to a working relationship.
Proposing ADR to settle a complicated business dispute might lead to an amicable solution. Business leaders may need support while preparing for ADR or learning more about ways to settle disagreements outside of court, and that’s okay.