While running your own small business, you could eventually find yourself dealing with a significant conflict. Whether it’s a contract disagreement with a former employee or a supplier who refuses to deliver on time or for the price you agreed upon, plenty of problems can develop that will impact your business’s ability to continue operating and generating profits.
Many people mistakenly believe that the only option is to take the other party to court for breach of contract or to enforce the terms of an existing agreement. However, it may be better for your budget and your brand’s reputation to instead consider non-litigated dispute resolution alternatives, such as mediation or arbitration.
Why consider mediation or arbitration for a business dispute?
Both mediation and arbitration offer a variety of benefits for someone attempting to deal with a contract dispute or business conflict. Both of these alternative dispute resolution options empower the parties involved in the disagreement to resolve things without going to court. They also let people maintain more control over the outcome.
Going to mediation or arbitration involves working with a neutral third-party professional, as well as your individual attorneys, who help the people in a disagreement reach a reasonable compromise. Generally, you will both have to agree to the terms in order for them to become enforceable. Failed mediation or arbitration can mean going to court anyway.
What are the differences between mediation and arbitration?
In arbitration, the neutral third party helps to create a solution after listening to the wishes and experiences of the people participating in arbitration. In binding arbitration, the parties have to enter the process while already agreeing to abide by the terms set by the arbitrator. Other times, they have the option to reject the solution if it seems too unfair or biased in favor of one party.
In mediation, the goal is a mutually satisfactory compromise. The mediator doesn’t set the terms but rather facilitates negotiations between the disputing parties to help them find their own solutions and compromises for their issues. An agreement is necessary for the results to become binding.
Either system can be a faster and more cost-effective way to resolve workplace and business conflicts than court-based litigation. Additionally, working with the other party instead of just taking them to court can help you avoid the brand damage caused by negative publicity.