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Serving clients in Hawaii and throughout California, including Sacramento, Los Angeles, Chico, Jackson and San Diego

Call Us Now Toll-Free

The pros and cons of alternative dispute resolution in business disputes

The pros and cons of alternative dispute resolution in business disputes

On Behalf of | Mar 1, 2021 | Business Litigation

Business owners in Southern California are always looking for a way to avoid spending necessarily. This includes legal disputes with customers, vendors, competitors, employees and more.

These days, many, if not most, businesses seek alternatives to trial when a serious legal problem arises. Tools like mediation and arbitration can resolve disputes without the cost, risk and hassle of a lawsuit. But alternative dispute resolution is not the best choice in every situation.

Some pros of mediation

One advantage of mediation is that it gives the parties more control over the outcome. In a trial, the judge or jury decides which party was right. In mediation, the parties work out a settlement themselves with the help of a neutral mediator. The mediator’s insights into the strengths and weaknesses of your case can be valuable.

Mediation can also be less destructive to your company’s relationship with the other party. A lawsuit between two businesses tends to sever that relationship. But a successful mediation can make both sides feel satisfied and willing to keep doing business together.

Mediation cons

There are some potential downsides to mediation you should be aware of. It only works if both sides are willing to negotiate and settle. If the other party is adamant about their position, mediation will almost certainly fail. Also, without a court order, it can be difficult to compel the other side to come to mediation. Finally, some cases involving particularly complex business or legal matters might be better served in court.

Mediation or trial? Talk it over with a business lawyer

A business owner dealing with a potentially expensive legal issue should consult an attorney about whether mediation would be the best choice for their company.

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