Is litigation or arbitration right for you?

| Oct 13, 2020 | business law | 0 comments

California business owners like you value your business connections. It is important for you to avoid burning your bridges. It is crucial to create support networks. Unfortunately though, disputes still happen. What you do to resolve a dispute depends, in part, on what you want out of the resolution.

Two of the options you can look at are arbitration and litigation. Each serves the same essential purpose: getting the dispute resolved. Each may offer you different benefits and potential drawbacks.

What is litigation?

The Balance discusses both litigation and arbitration as dispute resolution options. Litigation is the official legal process in which you take your dispute to court. There, a judge, and perhaps a jury, will listen to you and anyone else involved. You will present your case. The judge, or if a tried to a jury, the jury, then deliberates and hands down a decision that is legally binding. This option is if the stakes are high or potential arbitrator bias is a risk.

But litigation is also costly and time consuming. Your business is publicly displayed, too, due to it taking place in a court. Also, this method has a higher chance of burning your bridges with the parties you have a dispute with.

How does arbitration compare?

Arbitration involves an arbitrator or panel of arbitrators acting as a judge. They listen to you present your arguments and also hand down a decision. This decision is legally binding, too. Often, it is less costly and faster than taking your dispute to court. It also allows more wiggle room for debate and discussion between parties. This often allows you to preserve business relations even after a dispute. The main down-side to arbitration is that it has been well documented that parties that are repeat users of arbitration services have an advantage over parties that rarely arbitrate disputes, due to arbitrator bias in favor of repeat customers.