Dispute resolution is something that businesses today should know about. It is necessary for a business to be ready with dispute resolution before entering any kind of agreement. You can spend a lot of money ,time, and get frustrated in the process of dispute resolution. It only takes proper planning and your business can reduce risk and will be in a better position to resolve it favorably without spending too much. The business that understands dispute resolution is better prepared to direct its counsel.
There are various methods used for dispute resolution of businesses today. The four common methods used are voluntary negotiation and settlement or work-out, court litigation in state or federal courts, mediation, or arbitration.
IF parties agree on the procedure or arbitration, then this is specified in their agreement. After negotiation, the contract will insert a typica; arbitration clause. When two parties decide on arbitration, then their dispute will be resolved by an arbitrator. If a decision is not favorable to the losing party, it can be brought to court for enforcement. Awards given by the arbitrator are enforced by all state and federal courts.
Below are the implications of having arbitration as the method of dispute resolution by two parties.
One implication is that all disputes are arbitrable. When one party wants his payment obligations extended, he resorts to delay tactics which is not possible with an arbiter.
Usually, the name of the organization that will do the arbitration is included in the agreement, and when this is the case, both parties automatically incorporate a complete set of rules of informal procedure used to resolve similar disputes.
Both parties agree where the dispute resolution proceedings will take place.
The parties select experienced arbitrators who will decide the matter. These arbitrators have expertise in the general area of the business. IF the two parties in dispute are construction companies, then the arbitrator should have experience in construction disputes. Whatever dispute it may be, commercial disputes, employment disputes, labor disputes, maritime disputes, and whatever other type of dispute should have an arbitrator experienced in their area of business.
Most arbitrators are experienced and vetted adjudicators. They will take time to hear the evidence and decide the dispute in a more informal procedure than court litigation. It is possible to have one arbitrator or three arbitrators to resolve the dispute. It would take more time and will cost more if there are three arbiters deciding the issue.
They have limited discovery procedures which saves parties time and expense.
Arbitrators will assess the costs and attorney’s fees against the losing party and this the parties agree upon. With this, parties are encouraged to settle early.
Compared to court hearings, arbitration hearings are less formal. There are not formal rules of evidence that binds arbitrators and they are also not bound by the rules of procedures used and required by law.
It is the arbiter’s decision that is followed, and he does not settle or mediate disputes. They simply hear the evidence, the view of the parties, and make a final and binding decision.