Litigation serves as a legal tool by which parties can sort out their legal disputes. This is what most people think of when they think of “taking someone to court”. Though it has many benefits, it also has potent downsides such as enormous costs.
When you face a business dispute, is litigation your only option? Or are there alternative methods of resolving disputes that you can turn to instead?
FINRA discusses methods you can use to avoid litigation. You can do so by turning toward alternative methods of resolving disputes. Two of the biggest alternative methods include arbitration and mediation.
Arbitration trends closer to litigation. An arbitrator holds a similar role and power to a judge. They listen to you present your arguments and evidence, then make a decision based on that. The ruling they hand down is legally binding. This means all parties must oblige by it. However, it costs less than traditional litigation. It often takes much less time, as well.
Mediation is best if you believe you could work through your dispute with just a little outside guidance, rather than relying entirely on another party to resolve things for you. A mediator does not have the power an arbitrator does. They cannot give you legally binding rulings. But they will act as a referee during your discussions. They step in if things get too heated and ensure all parties have their say.
Each method benefits parties in different ways. It is important to weigh both the positives and negatives before you make your final decision.