Businesses in California can face many different types of legal challenges, from small business issues to Fortune 500 disputes. However, no matter the legal situation, finding a solution is usually paramount for decision makers. Taking the time to consider all options can be a useful first step in that process. One option, even if business litigation has already started, is the “alternative dispute resolution” process.
So, what is alternative dispute resolution and is it an option for your business? Well, alternative dispute resolution, commonly referred to as “ADR,” usually encompasses two main potential options: mediation and arbitration. To determine if these options might be helpful in your business dispute, getting to know the basics is a starting point.
Mediation is quite different from litigation because the process is usually much less formal. In the typical mediation scenario, the two sides in the dispute will gather at one location—probably the mediator’s office—and then a neutral, third-party mediator will go back and forth between the parties to hear legal arguments, consider potential evidence, and eventually try to suggest potential solutions to the problem.
Arbitration, on the other hand, can be quite a bit more formal than mediation, but less formal than actual court proceedings. In arbitration, like in a court situation, you will still see evidence and arguments presented but, unlike in court, it might be a panel of people hearing the dispute, or perhaps one person who understands the specialized nature of the situation, if applicable. In most arbitration scenarios, the parties agree beforehand to be bound by whatever decision the arbitrator arrives at.