Although litigation is frequently considered when a business dispute arises, there may be alternatives available that are more cost-effective in reaching a resolution. More often than not, business disputes arise out of a contractual relationship; thus, the first step in addressing the dispute is to review the contract and related documents. Many contracts have mediation and arbitration clauses which urges resolution of disputes by means other than traditional litigation through the court system.
Dispute Resolution Services in California
Mediation is a form of alternative dispute resolution. It is a voluntary attempt to settle a legal dispute through a negotiated settlement. The process generally involves both sides agreeing to select a mediator who is neutral and knowledgeable in the subject matter of the dispute. Oftentimes, the mediator may be an experienced attorney or a retired judge. For mediation to work, both sides must want to resolve the dispute through a compromise, and both sides must have faith and confidence that the mediator is truly neutral and is highly qualified in the law that touches upon the subject matter of the dispute.
Mediation usually requires both sides to share in paying the mediators hourly fee. The mediator usually will need to review all relevant documents in advance of the mediation, and in most cases, the mediator will benefit from a formal brief submitted by all sides, stating the positions of the parties. The mediation succeeds if all sides to the dispute agree to a settlement in writing. Although the cost of a mediation may be in the range of $4,000 per day, it is relatively inexpensive if it results in a settlement of the dispute.
Unlike mediation, arbitration is not a voluntary settlement process, but a trial before an arbitrator. An arbitrator is like a “rent-a-judge.” The judge, who may or may not be an actual judge, is a person who should be knowledgeable in the area of law that is in dispute. The parties, through witnesses, will try their case before the arbitrator. Generally, the rules of evidence are relaxed, and arbitrators typically will consider evidence that might not be considered in a court of law. After the case is presented before the arbitrator, a decision will be rendered. Unlike a trial before a judge in the Superior Court, the arbitrator’s decision cannot be appealed. There are very few and limited grounds to challenge an arbitrator’s decision. Additionally, an arbitrator’s decision can be entered as a formal judgment if not paid.
Mediation or Arbitration Clauses
Mediation and arbitration clauses reflect a point of view that these methods are preferable to normal litigation through our regular court system. There are many pros and cons in selecting mediation and/or arbitration vis-à-vis litigation in the Superior or District Court. For example, mediation may not work if all parties involved are not willing to settle. Additionally, arbitration can be very expensive to litigate, there is usually no remedy if the arbitrator fails to follow the law, or just gets it wrong. Before signing a contract with a mandatory mediation and/or arbitration clause, business owners need to be aware of the potentially adverse consequences.
How Our Roseville, California Business Attorneys Can Help
The attorneys at NewPoint Law Group have extensive experience in settling business disputes, including contracts which contain mandatory mediation and/or arbitration clauses, as well as through the use of traditional litigation. If you require assistance in resolving a business dispute, or if you are considering entering into an agreement containing an arbitration or mediation clause, please contact NewPoint Law Group at 1-800-358-0305 or message us online to schedule an appointment.