When it comes to alternative dispute resolution, arbitration has a strong correlation with business disputes. Many big companies include mandatory arbitration clauses in their contracts, so when people think of arbitration, they think of big companies.
Mediation, on the other hand, is a dispute resolution system that people frequently associate with the family law system. Many people use mediation to resolve custody disputes or disagreements about the division of marital property.
Mediation can also be a viable tool for those dealing with business disputes who would prefer to avoid court.
Mediation preserves your working relationship
Arbitration, like court, promotes an adversarial approach to a dispute. You each present evidence to make your side of the case and to secure the terms you want. In mediation, the goal is a mutually agreeable resolution that you reach through negotiation and compromise.
If you would like to continue doing business with the other party involved in the dispute, then mediation could help reduce the conflict between you and the other party and improve your chances of continuing to do business with them later.
Mediation leaves other options open
If you go straight to court or you enter into binding arbitration, you don’t have much of a say if the outcome for the proceedings is bad for you. In mediation, you typically are not bound to anything until you sign an agreement with the other party. If you cannot reach a compromise that you both believe is appropriate, you can choose not to sign an agreement and proceed with litigation afterward.
Exploring all of the dispute resolution options available for your company can make managing business dispute a simpler process.