Alternative ways to solve business disputes
When business partners disagree on something, they can go through neutral evaluation, arbitration, settlement conferences or mediation.
When business partners in California disagree about something, they may have to take their issues to court. Litigation allows feuding partners to put their problems before a judge and jury to get a binding verdict. Litigation can get expensive and take a lot of time. The United States Department of Justice says that alternative dispute resolution techniques have helped people across the country avoid 2,733 months of litigation and save $70,610,263 on discovery and litigation expenses in a single year. When both sides enter the resolution proceedings voluntarily, these techniques offer a 75 percent resolution rate.
If the disagreement involves technical issues, a neutral evaluation can help business associates find a middle ground. A third party who has no ties to either side and is an expert in the subject matter of the argument listens to each person’s evidence, and then gives his or her opinion. The evaluator may explain what he or she saw as the strengths and weaknesses of each argument before describing the best way to resolve the problem. The business partners are not obligated to listen to the advice of the evaluator, but it might help each side see the best way to move forward.
This procedure is similar to a trial setting, but it is usually a little less formal. A neutral third party hears the arguments of both sides, and then decides the outcome of the dispute. Before entering the arbitration process, the arguing business partners can decide to do a binding or nonbinding arbitration. If they choose binding, they must stick to whatever outcome the arbitrator chooses and they lose their right to go to court. Arbitration can be appropriate for both local and international businesses.
A settlement conference brings both parties together with their legal representatives and a neutral third person, often referred to as a settlement officer. After the arguments have been heard from both sides, the officer walks the partners through their options and helps them choose the best settlement. This type of dispute proceeding can be either mandatory or voluntary and can be used by anyone in a situation where settlement is an option.
When business partners want to preserve their relationship, mediation may be their best dispute resolution option. An impartial person, referred to as a mediator, helps the associates find a mutually acceptable outcome. Unlike with the arbitration process, the mediator does not make a decision. Instead, the arguing business partners can work together with the mediator to come up with a solution to their disagreement.
Business disputes in California can be solved through a variety of methods. No matter what type of resolution is wanted, it can be beneficial to work with an attorney who is familiar with business law.