How do you settle a business dispute out of court?

If you’re involved in a business dispute right now, you may want more than ever to keep it out of court. The courts are working very slowly at the moment, and it could be some time before they return to normal operations.

Even in the best of times, litigation is generally the most expensive way to resolve a dispute. It’s time-consuming and adversarial, and it can destroy any chance of returning to a normal business relationship with the other party. It’s also uncertain as to outcome.

There are other ways to resolve disputes. They begin with direct negotiation, but there are several alternative dispute resolution methods that can be less costly, less time-consuming and somewhat more certain than taking a dispute to court.

What forms of alternative dispute resolution are available?

Mediation is a lot like negotiation, except that a neutral third party called a mediator helps both sides communicate clearly and get to the bottom of the issues. A skilled mediator seeks a resolution that satisfies the needs of both parties, where possible.

Arbitration is a process much like litigation except that it is less formal, both in terms of process and in its rules of evidence. You and the other party would agree on a neutral arbitrator or panel of arbitrators who will hear each party’s case and make a final determination. In general, arbitration is considered binding, which means that neither party can subsequently take the dispute to court. Also, appeals of arbitration awards are very limited and rare, lending such awards even more finality.

When there is a broad gap between the parties’ beliefs about what a jury would decide, they may undertake a summary jury trial. This is a non-binding trial before a limited jury. Each side has a shortened time to present opening statements, summarize the evidence and make closing statements.

Then, the jury reaches a verdict that would presumably be representative of what a real jury would render if exposed to the full course of evidence. Once the verdict is in, the parties are sent back to settlement negotiations with new insight.

Somewhat similar to a summary jury trial is the minitrial. This is a voluntary procedure that combines some aspects of mediation, negotiation and trial. This is an abbreviated trial before a high-level executive from each party and a neutral adviser.

There is an abbreviated evidence-sharing process and the evidence is summarized in a short hearing. Then, the adviser gives an opinion about the likely outcome of a full trial and the executives begin new settlement talks.

Each of these methods has been used to resolve high-dollar, high-profile cases. If you are involved in a business dispute, an alternative dispute resolution method may save you time, money and uncertainty.