Though we often try to avoid them, sometimes conflicts happen. People break promises, contracts get breached, and sometimes people get hurt at work. There are a variety of options in these instances, but three options that can be useful are litigation, arbitration, and mediation. Though these might sound intimidating, all three are useful tools that might help you solve a dispute or disagreement.
When people hear the word “litigation,” they tend to think of lawsuits, and that basically is correct. Generally speaking, litigation is the process of resolving a dispute by filing or answering complaints through the public court system. Litigation involves taking your problem to court, sometimes in a trial, but not always, as litigation can end in a settlement or other such resolutions.
One advantage of litigation is that it creates a public record of a dispute, which can help prevent similar problems in the future. For example, if there is a contract dispute involving compensation or the price of materials, a finding in your favor may help ward off unscrupulous contractors or distributors. Another advantage of litigation is the structure it provides. The court can require parties to show up and provide witnesses and documents, which might be difficult to do without the court’s power.
However, litigation is not always the right option. It is no secret that litigation can get expensive, as the fees can add up quickly. Litigation also can be time-consuming, as you are at the mercy of the court’s schedule, which may be delayed. Filing a lawsuit also may cause more tension between the parties in a dispute.
Arbitration may be faster and more flexible than litigation. Arbitration also may be burdensome if a contract has an arbitration clause requiring the arbitration to take place in a state that is far away from yours.
Arbitration is one alternative to litigation. Arbitration is an out-of-court method to resolve a dispute in front of a neutral third party that listens to the parties, reviews evidence, and comes to a decision that is binding on both parties. Arbitration is beneficial in that it is less formal than litigation, but it still provides helpful structure and a clear outcome for the parties. Arbitration also may be faster and more flexible than litigation.
At the same time, arbitration may not be the best solution. It can be incredibly difficult to appeal an arbitrator’s ruling, unlike a decision in court. Arbitration also may be burdensome if a contract has an arbitration clause requiring the arbitration to take place in a state that is
far away from yours. Arbitration also may be less predictable than litigation in some instances.
Finally, mediation might be the right choice for you to resolve a dispute. Mediation is the process of jointly negotiating to find a solution to a dispute, which is done with the assistance of a neutral third party. Though this might sound like arbitration, mediation differs because it is even less formal than arbitration. In arbitration, both parties still present a case of sorts, while in mediation, the parties can more openly share their feelings and be more creative in helping find a solution to their problem.
Some advantages of mediation are that it can be even lower in cost than litigation or arbitration, as fewer resources and professionals are needed. Mediation also is more personal – the parties often are encouraged to not only share their take on the problem, but also share how it makes them feel and how it affects their life or occupation. Mediation can be far less time-consuming than litigation, as mediations are not bound by the same strict schedules as litigation.
Some disadvantages of mediation are that the process can lack structure and be open-ended, which might be frustrating if one or both parties want a more concrete solution. Additionally, litigation might still be needed to enforce the outcome of a mediation. Finally, mediation can be difficult if there is a lack of trust between the parties.
The next time you are reviewing a contract for goods or services, or preparing your organization’s contract, think about which dispute resolution option (if any) would be good for you and talk to your legal advisor. If a contract does not specify a dispute resolution procedure, then all these options are open to you – you may file in a court with jurisdiction, or you could get the other side to agree to mediation. When you next find yourself wondering how to handle a conflict, remember you have many options. Knowing the differences between litigation, arbitration, and mediation can help streamline finding a solution when conflicts surface.
Corrine Conway is an associate in the intellectual property department at Barnes & Thornburg, where she focuses primarily on trademarks, trademark litigation, and copyright issues. She can be reached at firstname.lastname@example.org.
NOTE: This article should not be considered legal advice. In all cases, groups should consult their legal counsel.