Alternative Dispute Resolution: Advantages for Businesses Amidst Judicial Backlogs
As court backlogs grow, businesses are gravitating towards Alternative Dispute Resolution (ADR) methods such as arbitration and mediation for their disputes. These methods provide confidentiality and expedite resolutions, protecting sensitive business information from public exposure.
Arbitration: Efficient and Confidential
Arbitration is favored for its efficiency. Companies often include arbitration clauses in their agreements, ensuring disputes are settled by arbitrators instead of in courts. However, arbitration is binding and decisions can be costly to appeal if they are factually incorrect.
Michael A. Saffer of Mandelbaum Barrett, P.C. underscores a significant drawback of arbitration: “The difficulty is [when] the arbitrator or arbitrators make a decision that you know is just flat-out wrong, factually. You can’t appeal that because the arbitrators didn’t engage in fraud or corruption. So, you’re stuck.” His observation points out the critical need for careful arbitrator selection to avoid errors.
Mediation: A Flexible Alternative
Mediation retains many benefits of arbitration, such as cost-effectiveness and confidentiality, but adds flexibility. It involves a mediator who assists the disputing parties in exploring settlement options. This process is less formal and can help maintain business relationships, as it encourages cooperative conflict resolution.
Both arbitration and mediation offer valuable alternatives to conventional court proceedings, providing private and faster dispute resolution options for businesses. Michael Saffer’s perspective on arbitration’s potential pitfalls emphasizes the importance of selecting competent arbitrators to mitigate risks.