A business dispute impacts you, your daily operations and even employee production and morale. Resolving the matter as efficiently as possible can help to minimize possible consequences.
You may envision a costly lawsuit in a business dispute, but a better way exists for many – alternative dispute resolution (ADR). The answers to some common questions about business ADR can help you learn more.
What is ADR?
Alternative dispute resolution is an umbrella term for a range of legal processes used to resolve disagreements and conflicts between business partners and associates.
Does Michigan allow ADR?
The state provides a legal framework for ADR, and several organizations promote its use. For instance, the State Bar of Michigan’s ADR Section provides resources and training for successful ADR, helping to ensure businesses can access well-trained mediators and arbitrators.
What types of ADR are available?
Mediation and arbitration are two common forms of ADR.
In mediation, a trained neutral assists the parties in negotiating a mutually acceptable agreement. Here, the parties reach a decision cooperatively – the mediator does not impose a decision.
Arbitration works differently. An arbitrator listens to both sides and then makes a binding decision, similar to a judge but in a less formal setting.
Is it expensive, and are decisions legally binding?
Costs can vary but are generally lower than litigation. Fees may include mediator or arbitrator fees and administrative expenses.
Decisions in arbitration are typically binding, while agreements reached in mediation can be binding if both parties agree to the terms.
When guided by a trained and experienced neutral third party, ADR offers a flexible and efficient way to resolve conflicts. In turn, business owners can preserve crucial relationships and continue focusing on operations without litigation worries.