Commercial lawsuits between businesses and consumers, vendors, suppliers, competitors, or other organizations can be lengthy and expensive. They can interrupt business operations, impact productivity, and damage a company’s reputation.
Regardless of the type of dispute, going to court is often the worst-case scenario. However, there are other options. If you and the other party can’t settle on your own, your next step should be to consider some form of alternative dispute resolution (ADR).
This resolution process can help parties work together toward a mutually beneficial agreement they can both live with. Several different types of ADR might work for your case. What are they, and what benefits could you gain from choosing this route?
Types of ADR
Alternative dispute resolution could take many forms, but there are three main types to consider: arbitration, mediation, and neutral evaluation.
Arbitration
Arbitration is similar to a courtroom trial but less formal. Each party in a dispute will present their side of the case to a neutral arbitrator, who is typically a legal professional like an attorney, a retired judge, or even a respected business professional familiar with the industry in question.
After hearing both arguments, the arbitrator has the authority to issue a decision about the outcome of the dispute. In binding arbitration, both parties agree that the arbitrator’s decision is legally binding, and they will abide by it. In such cases, there is no appeal.
This type of ADR isn’t for everyone. For one thing, the arbitrator is not a judge and isn’t necessarily bound to follow the law or base a decision on the evidence presented. If you opt for non-binding arbitration, the parties have no legal obligation to abide by the arbitrator’s decision.
Mediation
Mediation has more to offer than arbitration when it comes to flexibility and control. This type of ADR involves a neutral mediator tasked with listening to both parties and working to guide them toward a mutual agreement.
Mediators could be attorneys, retired judges, or business professionals from different industries. Some mediators are professionally trained to conduct mediation and act as an impartial third party.
Mediation is ideal for parties that cannot solve their dispute alone but are generally committed to avoiding court. Parties may bring attorneys to provide legal guidance and protect their interests. However, ultimately, they will have to work together, with the mediator’s help, to compromise and reach an agreement they can both accept.
Neutral Evaluation
Neutral evaluation is a step you may want to take before deciding whether mediation, arbitration, or a court trial is the best choice for your case. In this type of ADR, a neutral third party hears arguments from both parties and then offers an evaluation.
The evaluation typically lays out the strengths and weaknesses of the case, helping parties understand the potential costs, delays, and other pitfalls of taking the case to trial. The hope is that this process will convince the parties involved to lean toward mediation or other cost-effective resolution.
Benefits of ADR
Taking a case to trial can be expensive and time-consuming, and there’s no guarantee either party will get the outcome they want. ADR allows parties in dispute to engage in flexible and creative problem-solving that hopefully leads to an amicable and mutually beneficial agreement. Some forms of ADR offer greater control over the outcome of the dispute resolution process, as opposed to the uncertainty of allowing a judge to decide.
Legal Advice and Representation
Whether you engage in ADR or your case goes to court, it’s wise to retain qualified legal counsel to guide you through the process and represent your interests.
If you’re involved in a commercial dispute, the experienced commercial litigation attorneys at Kohan Law Group are ready to offer the legal advice and services you need. We serve clients in Suffolk and Nassau Counties on Long Island, the five boroughs of New York, and Westchester and Rockland Counties. Contact us now to schedule a consultation.