When a business runs into a dispute there are a few different ways of solving it. One can choose traditional business litigation or alternative dispute resolution (ADR) methods such as mediation and arbitration. Each conflict resolution method has its pros and cons, but all can be helpful in settling a legal dispute.
It’s important to know the difference between each method, so if your business has a conflict, you’ll be able to understand which method is right for you.
Litigation is a way to resolve a dispute through the public court system. To get the process started, the plaintiff must file a complaint with the court’s clerk. After there are meetings, the defendant must answer the complaint, and any evidence must be disclosed to the courts. Once in trial, the court will determine the outcome of the complaint.
Litigation is a long, thorough, and costly way to resolve a dispute. However, this is considered the best way to get a definitive answer to a dispute and each party has the option to appeal the judge’s decision.
How Much Does Litigation Cost?
Litigation is typically the most expensive form of conflict resolution. You should retain an attorney for the duration of your civil suit. The price varies depending on where you live, the experience of the attorney, how complicated the case is, and other factors.
How Long Does Litigation Take?
While most cases don’t actually go to trial, if it does it can take a couple of years before there is a resolution.
Mediation is a nonbinding alternative dispute resolution. According to the Deschutes County court, “Mediation is a procedure that brings you and the other party together to discuss your dispute with a neutral person who can help you create ways to settle your differences, but leaves it to the parties to decide whether to settle the case or to go before the judge.”
Each party will be able to explain the situation and their desired outcome. Typically, the mediator talks with each party separately and continues going back and forth between the parties until there is an agreement reached or until it is determined that there will be no agreement, at which point the case often proceeds to litigation. Sometimes, businesses are forced by the terms of their contract to attempt mediation before any litigation or arbitration can take place. You should be able to find out what the proper course of action is by looking at your contract.
How Much Does Mediation Cost?
The cost of mediation depends on how long mediation takes but is usually cheaper than litigation and arbitration because it is a more informal process, it can get done quicker than litigation, and both parties split the cost of the mediator, although each party still pays their own attorney fees.
How Long Does Mediation Take?
The duration of the process depends on the severity of the issue and how many mediation sessions it will take to come to an agreement. A person can expect each session to last a couple of hours.
Arbitration is another form of alternative dispute resolution that results in a legally binding decision. It is common to find a mandatory arbitration clause in business contracts since it is often cheaper than litigation while still offering a legally binding solution. Arbitration may be required in some cases where a lawsuit has been filed in court, requiring the parties to go through arbitration first.
In arbitration, both parties decide to hire an arbitrator (neutral third party) and schedule a date to share their case. The arbitrator listens to both sides, asks questions, and can ask that more evidence be submitted to determine a solution. This is essentially a hearing before a third party who is not a sitting judge rather than having a hearing before a judge in a courtroom. Often the arbitrator is a lawyer or a retired judge.
Decisions in an arbitration must be followed, and if not the party that doesn’t follow them can be sued. The American Arbitration Association is known for handling all types of arbitration cases across the United States. They have highly-qualified arbitrators, can facilitate a non-binding arbitration hearing, and provides lots of free information online. The rules of the Arbitration Service of Portland are often also used for local arbitration cases.
How Much Does Arbitration Cost?
The cost of arbitration varies based on the arbitrator’s fee and how long the process takes. There are also filing fees, hearing fees, administration fees, and even hearing room rental costs to account for when deciding on arbitration.
How Long Does Arbitration Take?
The preparation for arbitration can take a couple of months, but the hearing itself can take anywhere from a day to over a week, much like a court trial. There is no option for a jury, although an arbitration can be heard before a single arbitrator or before a panel of arbitrators.
Allow De Alicante Law to Represent Your Business in a Dispute
De Alicante Law Group is experienced in helping Oregon business owners with all legal services. From business formation to managing conflicts between third parties, we are here to represent your best interests. Contact us today for a consultation to assess your situation and find out how we can fight for you.