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Negotiate, Mediate, Arbitrate or Litigate?

business litigation lawyers

Only the most fortunate (or perhaps, the most passive?) business owners never get involved in any kind of business dispute. Business disagreements, of all types, are often an inevitable part of running a company, no matter whether the company is a large corporation, mid-sized business, small business, family business, or sole proprietorship. These business disputes can be internal company conflicts between, or among, owners or partners, or disputes between companies, or between companies and their vendors, customers, or clients. Our clients are often faced with disruptions and uncertainty caused by these types of business disputes. At Rosenbaum & Taylor, P.C., our business litigation attorneys help clients involved in business disputes ranging from issues arising from initial business formation, contracts, contract provisions, and terms, payment or non-payment, a current or future business opportunity and quality of work to dissolving or winding up of the business and other matters.

How Are Business Disputes Resolved?

Businesses have several options available to them to address, and attempt to resolve, business disputes, whether they are occurring within the company, with an outside company, or with a client, customer, or vendor. The approach we, at Rosenbaum & Taylor, P.C., would recommend to attempt to resolve a given dispute depends on the nature and severity of the dispute, the implications of the issues involved in the dispute, and whether the parties desire, and intend, that the business continues and if so, how it can, and should, continue. Often, it is most efficient and appropriate for the partners and/or owners to resolve their conflict, or dispute, quickly and privately, so that the business can continue operating with as little interruption and negative impact as possible. Other times, the business relationship is irretrievably broken and cannot be saved.

No matter what has led to the business dispute between partners or owners, and regardless of the nature of the business dispute, there are some common methods of resolving disagreements between businesses and companies and between, or among, business partners or owners. A good business attorney can offer recommendations and advice to help those involved in business disputes decide which method of resolution is best, under the circumstances, and what strategies to employ, to bring the dispute to a resolution.

Negotiation, mediation, arbitration, and litigation are the most common ways in which disputes are resolved. Oftentimes, these methods of business dispute resolution do not stand alone and in fact, frequently overlap. For example, if negotiations are unsuccessful, the business dispute may escalate to litigation. At that point, even once the lawsuit is filed, the dispute may be mediated, or sent to arbitration, if an arbitration clause is triggered. Even if a case is being litigated, as the parties see and perhaps accept, the relative strengths and weaknesses of their respective arguments, they may be open to working with their attorneys to explore ways of resolving the case without going through a full-fledged trial. The case may be mediated or arbitrated and if those means are successful, the case will be resolved. If not, the litigation will proceed and the case will be tried.

We Can Help You Negotiate a Resolution to Your Business Dispute

Although some parties dealing with a business dispute may opt to negotiate between, or among, themselves in an effort to attempt to resolve their issues, parties often hire experienced business attorneys to help them with negotiations. Good business attorneys, who can look at issues objectively, with the benefit of their knowledge of the law and their experience in other matters, can often help even warring parties reach an agreeable resolution of a business dispute.

With the help of experienced business attorneys, even parties involved in a nasty business dispute can often come to a negotiated resolution of their conflict. Many of our clients opt to have us attempt negotiation before resorting to other means of dispute resolution, because negotiation is generally the least expensive and most private method of resolving a business dispute, whether it is a dispute with another company or an internal dispute within the company.

The parties to a dispute, through and with their attorneys, can often work out a resolution to their dispute, without the need for mediation, arbitration, or litigation. This often brings the matter to a close more quickly and with fewer expenses than other methods of dispute resolution. It has the added benefit of being private and not airing the company’s issues in a public forum, like court filings. The benefits and advantages of negotiation are often apparent to the parties, which is why, even if the parties are planning to mediate, arbitrate or litigate the case, their attorneys are often still engaging in negotiations, in an effort to resolve the dispute amicably.

Any negotiated resolution is then generally reduced to writing and signed by the parties, so that there is an enforceable agreement, or contract, formalizing what the parties have agreed to do, or not to do. That resolves the business dispute and the parties can return their focus to other matters.

Should Your Business Dispute Be Mediated?

Mediation is a voluntary alternative dispute resolution method often used to resolve a business dispute without the need for litigation, or other court intervention. For mediation, the parties select an impartial person to assist them in reaching a mutually acceptable resolution of their business dispute. As with negotiation, which is an informal process that often continues while the parties are pursuing other methods of dispute resolution, mediation is an informal, flexible, non-binding process that can be employed after a lawsuit has been filed, as a means of resolving a business dispute without extensive litigation.

Mediation is generally optional (with the exception of courts, or cases, in which the judge requires that the parties mediate the case), but is always non-binding. The mediator does not make any decision on the merits of the business dispute and does not have the power or authority to force any type of agreement between, or among, the parties. The parties and their attorneys are directly involved in the mediation and are empowered to reach their own settlement or agreement or to opt not to resolve their dispute. The parties do not have to agree to resolve their issues at mediation and can, if they so choose, walk away from mediation in exactly the same position they were in before mediating. The benefit of mediation is that if the business dispute can be resolved, mediation often accomplishes that in less time, and with less expense, than arbitration or litigation does.

For mediation, a private mediator who is selected, and agreed upon, by the parties, works with the parties in an attempt to reach an amicable resolution. The selected mediator may be a retired judge, an attorney, a professional negotiator, or someone else experienced in the field in which the dispute has arisen. The parties, together with their attorneys, decide who would be the best person to assist the parties in resolving their business disputes. The parties also decide the framework for the mediation, how they wish to proceed and what role they want the mediator to play. The parties generally agree to share the cost of the mediator. The mediator manages the mediation process and assists the parties through the mediation, helping to facilitate communication and negotiation between the parties. The benefits of mediation are that the process is optional, private, flexible, and less formal than arbitration or litigation.

The mediator can hear each side’s position and arguments, review documents, ask questions, meet with the parties collectively, or individually, act as a “go-between” between the sides to the dispute, make recommendations, assist each side in seeing the strengths and weaknesses of its position, opine as to how a judge or jury might react to certain issues or information and encourage the parties to reach an amicable resolution. The parties can, always, in concert with their attorneys, reject the mediator’s opinions or recommendations and may opt not to settle the dispute at mediation.

In addition to being generally optional, and always non-binding, mediation is confidential. Unless the parties agree that the mediator can do so, the mediator does not share with the other side the contents of confidential discussions with one side and does not share publicly anything that occurred during the mediation.

Not all mediations are successful, but even mediations at which the parties do not reach a resolution of their business dispute can serve to move the matter toward settlement. Mediation can serve to clarify the parties’ positions, help the parties appreciate the relative strengths and weaknesses of their positions, define the areas of dispute, resolve certain aspects of the dispute and encourage future negotiations, or further mediation.

Do You Have to Arbitrate? Might You Want to Arbitrate?

Arbitration involves presenting the dispute to a single impartial third party arbitrator, or to a panel of three impartial arbitrators, who evaluate both sides and make a decision. Contract disputes are often particularly appropriate for arbitration. Unlike in the court system where judges are randomly assigned to hear and decide a given case, arbitrators are not chosen at random. The parties to a business dispute who choose to submit their dispute choose their arbitrator or arbitration panel.

Arbitrations are held out of court. Arbitrating a business dispute generally brings the parties to a resolution earlier, and with less expense, than litigation requires.

Assuming the subject dispute is arbitrable (a very complex issue for another time), arbitrations can be binding, or non-binding, meaning that depending on the circumstances that brought the case to arbitration, the decision of the arbitrator (or panel) may, or may not, control how the business dispute is resolved. Often, business contracts contain mandatory arbitration clauses, address the basic framework for arbitration in the event of a business dispute, and set forth whether the arbitration will be binding.

The arbitrator, or arbitration panel, largely controls how the arbitration proceeds, although, in arbitration, the formal rules of evidence do not apply, as it is not a court proceeding. Arbitrations are usually less formal and have less structure than court proceedings do, although discovery is generally available to the parties. Depositions are generally not permitted in arbitration, which keeps costs and expenses lower than in litigated cases. The arbitrator(s) may hear arguments from the parties, review relevant documents, hear testimony from witnesses and/or representatives from parties to the dispute and request submissions from the parties on the arguments and the legal support for their positions. The arbitrator or arbitration panel then renders a decision resolving the issue or issues that were submitted to arbitration. As in a traditional courtroom trial, in arbitration, only one side prevails. However, unlike a traditional trial, the parties’ rights to appeal are limited.

Should You Litigate?

Put most simply, litigation is the formal process of resolving a case in court by bringing a lawsuit. It begins with the filing of a complaint by the plaintiff and the filing of (an) answer(s) by the defendant(s). The parties then exchange information through a process generally known as discovery, witnesses are required to testify, motions may be made, and the case is scheduled for trial. A trial is public, therefore it is the least private, and most expensive way of resolving a business dispute, both in terms of time and money. However, in some cases, litigation is the only way to resolve a dispute among business owners, either because other methods of dispute resolution have failed, or because one, or more parties, was unwilling to attempt resolving the business dispute through avenues other than through the court.

Whether you want to, or will have to, negotiate, mediate, arbitrate or litigate your business disputes, the experienced business attorneys at Rosenbaum & Taylor, P.C. are here to help you, guide you, strategize with you and advocate for you.

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