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The pros and cons of alternative dispute resolution

On Behalf of | Oct 30, 2020 | Business Law

Many business owners fear the prospect of litigation. It can be expensive and time-consuming. As a result, alternative methods of dispute resolution have become increasingly popular. However, alternative dispute resolution may not be the right choice for everyone. There are pros and cons that each business owner will need to weigh as they try to find a solution to their dispute.


Mediation enables parties to state their case before a neutral third party. One of the biggest selling points of mediation is that it allows a party a great degree of control over the case’s outcome. You do not have to stress about the decision a judge or a jury may hand down. Another positive of mediation is that it allows for direct communication between the parties. You will get a better sense of the other side’s point of view. Mediation also allows for a broader range of remedies than those available through traditional litigation.

There are some drawbacks to mediation. Proceedings are confidential. If there’s an important point you wish to make or are attempting to burnish your business’s reputation in the court of public opinion, mediation may not be the right fit for you. In addition, mediation is only effective as long as both sides are willing to negotiate. If one side is entrenched, the mediation process will simply fail to work.


In arbitration, your case will be heard by a single arbitrator or a panel of arbitrators. Both parties must agree to arbitration. Arbitration enables you to get right to the point. The speed of the process is what attracts many parties to arbitration. Arbitration is also less procedurally complex than litigation. You and the other party are also responsible for choosing the arbitrator or arbitrators. This can help ensure a less biased approach to the proceeding.

One of the biggest drawbacks to arbitration is that any decision is final. You can’t appeal the decision or request a new proceeding. However, some arbitrations are non-binding. This means you can take the case to court if you’re unhappy with the decision. However, this will also render any time or financial savings moot.


You can always attempt to reach an agreement on your own. This approach may enable you to preserve your business relationships. The drawbacks to negotiation are that the advantage goes to the party with the most leverage, and talks can break down if any settlement offers are deemed unfair.

Litigation is always an option

Sometimes, alternative dispute resolution methods simply won’t suffice. There is still a place for litigating a dispute. You should discuss your legal options with a skilled professional.