Business disputes come in all forms. Because of this, there is no perfect one-size-fits-all solution for handling them. In order to manage disputes that occur in your time running a business, you must have a large toolbox of resolution methods.
Of all potential alternative resolution methods, two stand out above the rest. Arbitration and mediation.
Pros and cons of mediation
FINRA discusses the two most popular alternative dispute resolution methods. Arbitration and mediation both have their unique benefits and potential drawbacks. For example, mediation allows you more freedom when solving your dispute. A mediator does not have the ability to make a legally binding decision on your case. Instead, they act more like a referee. They ensure everyone gets to say what they want. They keep arguments from spiraling out of hand. They offer insight and opinions from a third party perspective.
This allows you a greater chance of preserving your relations with the other parties involved. But it works best if the dispute is not serious, volatile or involving high amounts of money or assets.
Arbitration vs. litigation
Arbitration is similar to litigation. An arbitrator fills a role similar to that of a judge. They listen to all parties present their side of the argument. Then, they make a legally binding decision that all parties must adhere to. The biggest benefit is that you do not need to go through a court date. This saves time and money for you and other parties. It also helps free the busy and overwhelmed legal system up to handle other cases.
Arbitration often works better for serious or more complex disputes. In the end, you must review your unique case and decide which would work better for it.