Most businesses will eventually face a dispute that could require legal assistance to resolve. When those situations arise, it is important to consider all dispute resolution options carefully. Each option offers certain advantages and disadvantages, although litigation may be the best resolution option for a business dispute. Knowing what each dispute resolution option is can help you decide if litigation as a resolution option is best for your business.
Dispute resolution options
Legal disputes can come in many forms for business owners. Some common disputes include a partner or shareholder disagreeing with how the business is managed, wage disputes, or claims of discrimination. A liability claim made by a customer is also considered a legal dispute for businesses.
The options available for dispute resolution will be different in each situation. Dependent factors for resolution options include the companies involved, the contractual agreements, and the exact nature of the dispute itself. Mediation, arbitration, and litigation are the three most common dispute resolution options.
Mediation involves a neutral third-party, or mediator, working with both parties to reach a mutually agreeable solution. This resolution option is usually cheaper and faster than litigation or arbitration. The downside is that mediation is not binding. Either party could back out of the agreement at any time.
Arbitration is another option for dispute resolution. In fact, some business contracts require both parties to use arbitration to resolve disputes, instead of litigation. Arbitration involves each party presenting evidence and arguments to a neutral third-party, known as an arbitrator. The arbitrator considers the evidence and decides on the appropriate resolution. With binding arbitration, there is no appeal for either side. Whatever the arbitrator decides is the final outcome. This dispute resolution option is faster and cheaper than litigation.
Litigation as a dispute resolution option
Litigation offers certain advantages over mediation, arbitration, and other dispute resolution methods. This option gives both business parties various investigative tools, including the right to subpoena witnesses, gather evidence, and cross-examine the other party.
Litigation offers the plaintiff the option to seek monetary damages and to put a stop to activities which might be harming the business. Unlike other dispute resolution options, litigation offers the right of appeal.
There are downsides to litigation, though. This method is more expensive and takes more time. In some cases, litigation can bring negative publicity to a business. This resolution option may require you to reveal private or confidential information about your business, as well.
Litigation may be the only solution in situations where one party is unwilling to negotiate. Litigation can also be used when there is a complex legal question that the courts need to resolve. The only way to know if litigation is the right option for your business is to speak with a qualified litigation attorney. The attorney can review your case and determine which path is the best choice.
If you need help resolving a business dispute, contact the attorneys at Sprouse Law. Call us today at (806) 468 3300 or Contact Us by email for more information about our services. We have locations in Amarillo, Austin, and Victoria, Texas as well as Tulsa, Oklahoma.