When parties make business agreements, disputes relating to those agreements can result in serious demands being made. One party may threaten to take legal action in order to possibly provide a desired resolution.
While courts in California are certainly capable of resolving business disputes, litigation can be extremely costly for all parties involved. For this reason, some companies may prefer to utilize an alternative dispute resolution, such as mediation or arbitration.
Both mediation and arbitration can certainly offer some advantages as opposed to going to court for certain parties. In other cases, however, mediation or arbitration may carry far more risks.
Mediation vs. Arbitration in California
Mediation and arbitration are similar in that both processes utilize the services of an independent third party. The difference is that in mediation, this third party works to help the two parties achieve a mutual compromise, while an arbitrator will listen to both sides and deliver a ruling that typically favors one side over the other.
The method of alternative dispute resolution selected should take account of a number of important considerations for a company. For example, parties that can be generally inclined to work with one another again may be more inclined to choose mediation over arbitration in the interest of securing an agreement that satisfies both sides.
Both mediation and arbitration can reduce the level of confrontation that both parties would otherwise feel in a court case. While both sides will typically retain legal counsel, the fees spent on attorneys are usually much lower. Mediation and arbitration both also provide for quicker resolutions than are typically possible in civil courts.
Mediation and Arbitration Processes in California
When two parties enter into an alternative dispute resolution, both sides will generally have to agree on the mediator or arbitrator who handles their case. In most cases, the costs of hiring the mediator or arbitrator are shared by both parties.
In mediation, the mediator hears both sides explain their problems and then offers possible solutions. The mediator generally does not take sides and only offers suggestions to help facilitate a compromise. The mediator’s job is complete when the two parties arrive at an agreement, and the mediator will usually declare an impasse if the two sides cannot come to an agreement. Some cases may proceed to court.
In arbitration, both sides may have to attend a preliminary hearing with the arbitrator before exchanging information and appearing at the main hearing. Parties may provide additional information to the arbitrator, but the arbitrator will generally close the record and issue a final decision.
One major drawback to arbitration is that people typically have very little recourse when they disagree with the arbitrator’s decision. For this reason, any company considering alternative dispute resolution should be certain to have their case evaluated by an experienced business litigation attorney.
Find a Business Litigation Lawyer in California
If you or your company is considering mediation or arbitration in California, it is in your best interest to make sure that you have legal representation. Leiva Law Firm represents clients all over the greater Los Angeles area.
Our firm can help you determine where alternative dispute resolution is preferable to taking your case to court. Call 818-519-4465 or contact us online today to receive a free consultation that will let our business litigation attorneys review your case and answer all of your legal questions.