Texan business owners like you must prepare yourself for a day in which you face a dispute. Business owners across the board want to avoid issues among yourselves. Unfortunately, disputes are not always easy to avoid.
Rather than hope you never run into one, it is better to prepare for the worst. So what are your options for dispute resolution, anyway? Is there one that is better than the rest? Or does it just depend on the situation at hand?
What are the risks of litigation?
FINRA looks at arbitration and mediation, two alternative dispute resolution methods. Experts often compare them to litigation. This is the “traditional” method involving taking someone to court. With litigation, you may lose time and money. You can also lose the ability to maintain good business relations with the other parties. On the plus side, the judge hands down a legally binding decision. This takes having to work through the dispute yourselves out of your hands.
How does mediation and arbitration stack up?
Arbitration is a midway point between mediation and litigation. An arbitrator hands down a legally binding decision. But arbitration costs less than litigation. You do not have to spend so much time in court. Your dealings are not public record, as they are with litigation. This allows a little more room to maintain friendlier relations, too.
Mediation does not involve any legally binding decisions. This option is best if the argument is not big, or if you think you can work through it. A mediator is there to bounce ideas off of and guide the general discussion. They speak up if arguments begin to spiral out of control. But the final decision lies in your hands. In other words, the method that benefits you most depends on the type of dispute you are in.