Disputes are, for the most part, unavoidable for business owners at some point in their careers. Some disputes center around issues like a breach of contract with a supplier or purchaser. Other disputes can involve employees who feel as though they were treated unjustly or terminated without cause. Still others may be brought about by shareholders who disagree on business matters. No matter the dispute, your business will be better off hiring a California business law attorney.
Is Litigation the Most Frequently Used Method of Resolving Business Disputes?
When a dispute arises, parties have to consider their options in resolving the conflict. There are four methods most commonly used: negotiation, litigation, mediation, and arbitration. No one is better than the other because each dispute is unique, and each method has its advantages and disadvantages. Litigation is one of the most frequently used methods of resolving business disputes, but many disputes are able to be resolved before they reach this point.
What Is Litigation?
Litigation involves going before a judge or jury to resolve the claims that one party has against another. Small businesses typically utilize a small claims court so that only the parties and the judge are present for the trial. Larger corporations usually retain lawyers and allocate specific amounts of their budget for litigation because the proceedings, fees, and court costs can be significant and even stretch on for years at a time.
Highly contentious disputes are commonly solved through litigation because the other party is usually not willing to negotiate. If it seems worthwhile that the time and money you spend in the courtroom will result in the likelihood of success for you and your business, litigation is a safe and effective choice.
What Are the Advantages of Mediation?
Alternatively, if a business owner or their attorney identifies too many downsides to litigation, mediation is another possible route. For cases that have the potential of months or even years of legal proceedings, a neutral third party can be a great benefit to the negotiation process.
This third party is tasked with finding a solution that both parties are comfortable with, and mediation can occur in conjunction with litigation. In fact, some courts may require attempts at mediation prior to litigation, and it is, of course, a method many try before entering the courtroom.
What Are Arbitration and Negotiation?
Arbitration is a similar process to solving disputes outside the courtroom. One important difference is that arbitration is binding on both parties, meaning it is just as legally binding as a court decision would be.
The process is, therefore, more formal and typically requires three arbitrators: one for each party and then a third selected by the two first arbitrators. In this way, the arbitrators make decisions by majority vote. The decisions are confidential, which is ideal for larger corporations.
Negotiation is the easiest and least formal form of dispute resolution and is often the first step. It does not require an attorney or third party and is an informal method both parties can use to try to solve their dispute in a flexible, mutually beneficial way with the least amount of time and money.
FAQs
Q: What Is the Most Common Method Used to Resolve Disputes?
A: The most common method to initially resolve a dispute is negotiation, where the parties can meet prior to litigation to attempt a common resolution. The advantage of negotiation is the amount of control each party has over the process, including the potential solution.
The process is also more flexible than arbitration, mediation, and litigation. Unfortunately, if one party is not open to negotiation and wants to take the case before a judge, then litigation, sometimes combined with mediation, is imminent.
Q: What Is the Most Effective Way to Resolve Business Disputes?
A: Depending on the issue at stake, whether it is a conflict over a contract or a disagreement between business partners or employees, there is no one way to deal with the problem.
Negotiation, mediation, arbitration, and litigation are all valid options, but you must first explore the root cause of the dispute and evaluate ways to determine an efficient and cooperative resolution for everyone involved. Many disputes result from a breakdown of communication or a misunderstanding between the two parties.
Q: Which Is Better: Arbitration or Litigation?
A: Neither is necessarily better when it comes to resolving business disputes. Rather, it depends on the specifics of the case and the outcome the parties desire. Arbitration has several favorable aspects, chief among them the cost-effectiveness of the process.
It is usually less expensive than litigation due to the fact that it requires fewer procedural hurdles, and its overall process is much more streamlined. It is also a quicker option because court cases can be dragged out almost indefinitely.
Q: What Is the Simplest Form of Dispute Resolution?
A: Negotiation is considered the most basic form of resolution and is typically the first step people take to try to resolve a legal dispute. It does not cost anything upfront, and no third parties need to be involved. It may be wise, however, to consult an attorney to gather information about protecting your interests and assets. Negotiation does not possess rules or regulations; parties are allowed to communicate via phone, email, video call, or in person.
The Myers Law Group Can Help
Business owners certainly do not want to involve themselves in disputes, but it is sometimes necessary or unavoidable. When someone brings a claim against you, or you feel compelled to file a claim against another individual or organization, it can be daunting to try to figure out the right course of action.
Even if you feel prepared to take on a claim yourself, consider consulting with The Myers Law Group first. We can help protect your business, assets, and reputation and allow you the time, energy, and mental capacity to get back to doing what is important. We desire, above all else, that our clients’ financial, emotional, and professional worlds remain unshaken. If you would like to learn more about the services our firm offers, do not hesitate. Contact our office today for a consultation.