Legal disputes involving your New York business are a threat to your livelihood and the future of your company. While it is critical to resolve these issues quickly and efficiently, it is not always necessary to resort to litigation to reach a beneficial outcome. In some cases, alternative dispute resolution could be a better way to move past certain types of complications.
There are various types of alternative dispute resolution that may be beneficial for you and your business. Avoiding litigation will not only help save you time, it could be more cost-efficient than fighting for a resolution in court. While litigation may sometimes be necessary, it is not always the only option.
Two types of alternative dispute resolution
There are two main forms of alternative dispute resolution that offer you an opportunity to avoid the cost, stress and time associated with the litigation process. The differences and benefits of each are as follows:
- Arbitration: In the arbitration process, a dispute is resolved with the help of an intermediary third party chosen by the two disputing parties. The intermediary will hear both sides of the dispute, then make a decision for a final resolution. Often, arbitration leads to negotiations between the two disputing parties.
- Mediation: This is a choice that is growing in popularity because it allows the two parties to resolve disputes through negotiations and discussions. A neutral third party oversees this process, and the resolution must be voluntary and mutually beneficial. The mediator's role is to facilitate discussions and help guide the parties toward a positive settlement.
The practicality of alternative dispute resolution largely depends upon the nature of the dispute, the issues at hand and the willingness of the two parties to work together to reach a beneficial outcome.
Required alternative dispute resolution
Some contracts require that disputing parties first use alternative dispute resolution before going to court. Business-related contracts often contain arbitration provisions, and some courts require that the parties go through mediation before attempting litigation.
You may find that one party is disputing the arbitration provisions or may try to evade the process and go straight to litigation. Issues involving this type of dispute or questions over the application of the terms of ADR provisions in a contract can be particularly complex. Determining rights, obligations and the most reasonable course of action may require close knowledge of the law and experience in complex and high-stakes contract disputes.