If you’ve signed on the dotted line of a contract, whether it was drawn up by your attorney or someone else’s, you may have felt some piece of mind in knowing there was a clause regarding how all parties were to proceed should there be a dispute. Often, this states how one party will present the dispute to another, along with specifics regarding where and how the issue would be resolved, and who would pay for attorney’s fees, and more.

Instruction on how any legal dispute will be resolved is something you should pay close attention to though. If the clause states that arbitration would be used over litigation, you may feel an initial sense of relief. Litigation as a rule is often known to be more drawn out, time consuming, expensive—and in many cases—exhausting. Resolving your issue in a public venue such as the courthouse means you will have little privacy regarding the matter. It may also take months to get a court date.

Arbitration offers privacy regarding the case, as well as greater ease in scheduling and more flexibility. More importantly, it is usually hoped that the parties can participate more amicably and reach an agreement with less adversity. The proceedings are expected to be simpler, with no juries involved, less paperwork and discovery, and less chance for delay.

The flip side of that though, and much of what you may not expect until you are embroiled in the middle of arbitration, is that most decisions are final. Appealing is generally not part of the process, and whatever decision is made is usually considered to be final. While mediators or arbitrators (depending on state requirements) may have a lot of experience in the subject at hand, they often do not have law degrees, and their ‘rulings’ may be considered more subjective. The casual atmosphere may seem attractive at first too, but you might find yourself at a loss later if you need transcription or a recording of the proceedings.

In choosing litigation for conflict resolution, you are at the mercy of the court’s schedule and may pay higher fees to fight a lawsuit, but keep in mind that you also have the protection of the court behind you. A judge will be presiding and most likely ruling on precedent, and your representation will have a law degree.

Arbitration can also show its uglier side if you have signed a contract stating such conflict resolution will be used—allowing no option to go to court later. This could be important if you end up with a very serious case, and find yourself embroiled in a battle with a very well-off company with resources who are more skilled in such a setting. Arbitration may also work against you in consumer disputes, such as with a phone company or creditor.

Do you have questions about drawing up or signing a business contract? Are you in the middle of a business dispute and require experienced representation? Call Shane Coons now at 949-333-0900 or email us at Shane.Coons@seclawoffices.com. We will be glad to review your case, answer your questions, and help you move forward with success.