Smart business owners know that avoiding litigation is important. Litigation is time-consuming and takes attention away from other, money-making Ventures. Additionally, litigation can ruin potentially valuable relationships. It is better to try alternative means of resolving disputes before taking an entity to court.
One popular alternative dispute resolution method is arbitration. According to FindLaw, arbitration involves both parties submitting the dispute to an arbitrator or a panel of arbitrators who will then issue a ruling much like a judge.
What does arbitration look like?
There is no one set version of arbitration, which is one of its advantages. Unlike the court system which has a rigid set of steps and laws, arbitration is much more flexible. It is common for the feuding parties to choose an arbitrator or a panel of arbitrators to act like a judge. Being able to choose your own arbitrator is also one of the benefits of arbitration. Depending on the nature of your dispute, it may be beneficial to have a ‘judge’ figure with actual business knowledge in your vertical. Meanwhile, a judge is a law expert but not an expert on your business.
Keep in mind that in most cases arbitration is a binding process. This means that the decision the arbitrators hand down is going to be very difficult to overturn. This is in contrast with mediation, which is non-binding.
Can I always arbitrate?
The option to arbitrate the dispute always exists. However, both of the feuding parties must agree to an arbitration process. Just because one party wishes to arbitrate does not mean that the other party loses the right to take the case to court. But if both parties agree to arbitration, you can arbitrate almost anything.