Business disputes arise between companies or businesses when they are unhappy with the outcome of a particular transaction or agreement. Businesses are multifaceted. There are deadlines to meet, goods to produce, products to deliver and employees to sustain. That is why in any industry, disputes are bound to happen. Fortunately, there are ways to resolve them.
Private methods to address business disputes
Most businesses would like to mitigate conflict by resolving disputes privately. Alternative dispute resolution (ADR) allows parties to reach a settlement away from the court. Here are the three basic methods to achieve this:
- Arbitration: Arbitration is one of the more common ways to resolve business disputes. The parties must present their cases with substantial evidence to an arbitrator in arbitration. The arbitrator will decide who to rule in favor of, and their decision can be binding or nonbinding. Virginia adopted the Uniform Arbitration Act. The law states that the parties must submit controversies or disputes to arbitration if they had agreed to do so in their contract. Neither party can appeal the decision if there is a binding arbitration clause.
- Mediation: Mediation is another way to go through the resolution process with the help of a neutral third party or the mediator. The mediator cannot decide on the case, nor can they force the parties to agree on a settlement. The disputing parties still have significant control over the decision process, as the mediator is only there to help them find common ground.
- Negotiation: Negotiation is when the two parties try to reach a compromise without the help of a neutral third party. They decide on how to address the dispute and negotiate on their terms. Just like in arbitration, they can have a lawyer represent them throughout the process.
However, these methods can take time and money especially when neither party is willing to settle. No matter how much you try to reach a mutually beneficial agreement, a settlement will always favor another party.
When should you litigate?
If the alternative dispute resolution methods above fail, the parties can litigate. The lawsuit will ensure everything is on public record, which means you will have access to documents that can further your case that one party could conceal without court intervention. Through litigation, both parties can thoroughly deal with all disputes. The court will ensure that both parties cooperate and follow legal standards, including more stringent evidentiary procedures.
With litigation, you can appeal your case and make sure you get a just and fair decision. It can be much more cost-effective and less time-consuming when addressing business disputes.