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If you are having a dispute with an employee, client or business associate, you may wish you could resolve the issue without damaging your relationship with that person or putting strain on your company. After all, you may still benefit from the other party's business associations, and a legal battle often creates irreparable rifts between the participants.

Fortunately, more Alabama businesses prefer alternative dispute resolution methods to reconcile their differences instead of taking the matter to court. ADR, such as mediation or arbitration, offers many advantages to a business owner who is facing a conflict related to contracts or other matters.

Understanding arbitration

While arbitration and mediation are both forms of dispute resolution, they are very different processes with their own advantages and drawbacks. Choosing the form of ADR that will best suit your circumstances requires an understanding of how each method works.

Arbitration, for example, more closely resembles a trial although it does not take place in a courtroom. A neutral third party, the arbitrator, hears a limited amount of evidence from each party. There is no period of discovery, and no witnesses testify beyond the parties involved. The goal is to obtain a decision from the arbitrator, and that decision is legally binding.

Understanding mediation

Rather than seeking a decision, mediation is often more about reaching an understanding. You and your opponent meet with a neutral third party, the mediator, who is more of a facilitator of your discussion. You work through the points of contention and try to find a middle ground that is agreeable to both of you. Any decisions you reach may or may not be legally binding, and unlike arbitration, you may stop mediation at any point and move to litigation.

One of the important benefits of both of these types of dispute resolution is that they remain out of the public record. A civil trial may bring out confidential information about your business, so dealing with your disagreement behind closed doors may be an attractive option. Additional benefits include the fact that ADR often takes much less time than a trial, and it can be less stressful on the finances and resources of your business.

Facing a dispute with another party can be intimidating and concerning, especially if the outcome may have a serious impact on your business. You may find many advantages in having a legal advisor who has a successful history in the courtroom but who is also experienced in different forms of alternative dispute resolution.

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