Pros and Cons of Mediation and Arbitration

Fotolia_183822998_Subscription_Monthly_M-300x176Many San Jose business owners find themselves embroiled in legal disputes with vendors, clients, employees, contractors, and other business relationships. It is highly likely that a legal dispute will arise at some point during your business operations. It can be difficult to know how to resolve such a dispute. Litigation can subject a business to unnecessary time, effort, and costs which will not always be reimbursed after a trial. Yet in some cases, litigation remains the only method of effectively preserving important legal rights.

Mediation and arbitration provides clients with the ability to settle their claims quicker and for less expense. However, one of the biggest cons of mediation and arbitration is the fact that neither party will be totally satisfied as the result of settlements is a compromise.

The experienced San Jose corporate attorneys at Structure Law Group have extensive experience in litigation, mediation, and arbitration.They can help you determine how best to protect your financial and legal interests in a business.

The Pros and Cons of Litigation

Litigation is the formal process of prosecuting a claims through the court system. It consists of filing a claim, raising evidentiary issues and other preliminary matters, and presenting the claim to a jury at trial. The jury then renders a decision which can leave the plaintiff with some, all, or none of the financial relief it asked for. As a result, a trial can be risky for both a plaintiff and a defendant. A plaintiff risks not receiving the damages they sought, but also incur the expense of litigation. Between filing fees, attorneys fees, and other court costs, the expense of litigation can be significant. The defendant, on the other hand, also risks being ordered to pay the full amount sought by the plaintiff in addition to attorneys’ fees and litigation costs. Depending on the claims involved, both parties bear the risk of potentially paying for the opposing party’s attorneys’ fees if they are successful.

And yet there are times when litigation is a claimant’s only option for protecting important legal rights. If a defendant makes no settlement offer and shows no willingness to negotiate, the claim has nowhere to go but trial. Or if a plaintiff makes claims which harms a defendant’s reputation or the goodwill of its business, it may be necessary to litigate the claims in order to protect the financial interests implicated by them. Outside of these extreme circumstances, however, it is often possible to negotiate a settlement which can save both parties the costs of litigation.

What Are Mediation and Arbitration?

Parties are always free to negotiate their own settlements, and these formal processes do not have to be used to do so. But the assistance of a third party or formal negotiation process can often improve the chances of successfully negotiating legal claims.

Mediation is a process whereby a neutral third party (the mediator) attempts to negotiate terms of a settlement offer which both parties can agree to. The courts appreciate mediation because the parties settling their claims results in the courts being able to clear the docket of unnecessary trial dates. The goal of mediation is often to create an agreement which both parties can live with (even if they did not get exactly what they wanted). No agreement or court orders can be forced upon a party in the mediation process.

Arbitration, by contrast, is more formal, and more like a trial. The parties will often give testimony or present other evidence to the arbitrator. The arbitrator then makes findings about the case. The parties can agree that an arbitrator’s decisions will be binding. In this case, a party must have legal grounds to appeal an arbitrator’s decision to the court.

Contact an Experienced California Corporate Attoryney Today

The experienced corporate attorneys at Structure Law Group help business owners determine whether to settle their claims through mediation, arbitration, or litigation. Schedule a consultation today by calling (408) 441-7500 today, or emailing slgadmin@structurelaw.com.

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