California business owners like you want to excel in your work. One of the ways to do that is by expanding your reach and connecting with other business owners. You can even strike up partnerships and collaborations.
But what happens when these deals go sour? What happens if you run into an argument? You do not have to turn to litigation right off the bat. Instead, you can examine some alternative methods.
The value of arbitration
FINRA looks at both mediation and arbitration, two forms of alternative dispute resolution. Arbitration works like litigation, which is the traditional court-based style of resolution. With litigation, you must have a court hearing over which a judge presides. The judge makes a decision based on what the parties present and passes down judgment which legally binds all parties.
Arbitration is similar in that an arbitrator or panel of arbitrators fills the role of a judge. They listen to the arguments and information provided. From there, they decide how to handle your dispute. Their decision is binding, just like a judge’s. However, in most cases you do not need to take the case to court. Even if you do need to go to court, it usually is an expedited matter in which the court merely confirms the arbitration award by entering a judgment to enforce the award. This saves time and money. It also may keep your dispute out of the eye of the public.
Mediation is very different than arbitration or a court action. A mediator cannot pass legally binding decisions. Instead, a mediator guides a discussion between the parties in an effort to reach a compromise that each party can accept. Mediators often seek to give each party an opportunity to fully explain their position, then guides the discussion towards a resolution that adequately satsifies each party’s needs. Skilled mediators help deescalate arguments and offer suggestions based on information you provide. From there, it is up to the participating parties to decide on a path of action together.