Many California business owners will find themselves involved in a business dispute at some point. However, not every dispute has to cost you a significant amount of time or money. In some instances, you may be able to reach a resolution without taking your case to court, which may help you preserve valued business relationships, among other benefits.
You may want to consider trying mediation or arbitration before litigating your business dispute. Below is a breakdown of mediation, arbitration and litigation.
Mediation
In mediation, the opposing sides work to come to a resolution with the help of a neutral third party: a professional mediator. The mediator will listen to the arguments of all involved parties, before exploring possible solutions and ultimately working to facilitate a resolution. In mediation, resolutions are both voluntary and nonbinding.
Arbitration
Arbitration also involves a neutral third party, known as the arbitrator. The arbitrator listens to the arguments and evidence presented by each involved party before coming to a decision. Unlike mediation, decisions made by arbitrators are binding and typically cannot be appealed.
Litigation
Litigation involves you and others embroiled in your business dispute facing off against one another in court. Some business owners see civil litigation as a last resort if other efforts to resolve their disputes fail. If the dispute cannot be resolved in an agreement during the pretrial period, a judge or jury will hear the evidence and make a final ruling.
Reaching a resolution during negotiations, mediation or arbitration can be ideal in many circumstances. However, in some cases, litigation may be necessary when coming to a more amicable solution is not possible and a more formal and traditional process is needed. An experienced business law attorney can provide guidance from the start on what option might be in your best interests.