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If you are engaged in a business dispute where you are owed money, supplies, labor, or results, you may have tried working with the other party to demand what you are owed, only to be rebuffed or given promises that remain unfilled. Now you are looking for ways to resolve the conflict. A lawsuit is typically the first option that comes to mind but it is not the only way to resolve these difficulties. Instead, many people choose to use alternative dispute resolution (ADR), mediation or arbitration, and some contracts specify that ADR must be used. Here is a quick guide to mediation and arbitration, their benefits and weaknesses. Mediation Mediation is an informal meeting where all parties in a dispute are brought together to discuss the dispute with the guidance and input of a mediator, an impartial and objective person, typically a lawyer with experience handling this type of dispute. Mediation is typically non-binding and has a goal of having parties work together to get a compromise. It is often advisable to have a business lawyer present during mediation. Mediation is advantageous because it can diffuse conflict, but its main disadvantage is that it cannot guarantee a resolution. Binding mediation can guarantee a resolution, with a compromise specified by the mediator. A business lawyer is recommended for parties entering binding mediation. Arbitration Arbitration is a more formal hearing similar to a court case in which each side presents arguments and a judgment is made. Where mediation leads to compromise, arbitration tends to lead to decisions in favor of one side or another. Arbitration is different from a lawsuit in that judgments are made not by a judge or jury, but by an arbitrator or arbitration board selected by the parties in the dispute. Before entering arbitration, it is strongly recommended that you hire a business lawyer that can present your arguments in a compelling way to the arbitrator. When Do I Have to Sue? Unless your contract with the other parties specifies ADR, mediation and arbitration are voluntary. If the other parties in the dispute do not agree to mediation or arbitration, then filing a lawsuit is the only way to compel them to resolve the dispute.
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