As a business owner, it is important for you to have tools for solving disputes at your disposal. After all, disputes will likely occur in some form sooner or later. It is wiser to have a plan of action than to simply wait and hope you never get into any disagreements.
But what sort of tools can you collect to help with disputes? Litigation is not the only option at your disposal.
The role of arbitration
FINRA lists two popular alternatives to litigation. The first is arbitration, and the second is mediation. Both serve unique purposes and have their own benefits and potential drawbacks. For example, arbitration is similar to litigation. An arbitrator fills a similar role to a judge. They listen to both parties present their side of the argument. They evaluate the evidence and testimony. From there, they make a decision and hand down a legally binding order for both parties to abide by.
How mediation works
Mediation, on the other hand, has a looser form. A mediator cannot order a decision like arbitrators and judges. Instead, they listen to the parties as they talk through their disagreement. They may chip in with suggestions or step in if a disagreement gets too heated, allowing all parties to step back and take a breather. This option works well if you believe you could handle the dispute on your own and just need a little structure and guidance.
Litigation does work best in some cases, but it does not need to be the first option you leap to. Instead, consider what your particular dispute needs and what would work best to solve it.