Disagreements in the business world are unavoidable, regardless of the relationship between the parties and how well-drafted their contracts and other agreements are. Although a dispute can potentially land both parties in court, there are many situations that can be resolved through arbitration. Conversely, some cases are simply too complex and intractable and therefore require the parties to pursue litigation.
Understanding the differences between litigation and arbitration can help your business prepare for and address conflict, if and when it arises. Turn to the experienced counsel of Levy Goldenberg LLP to handle your Manhattan business law needs.
Understanding Arbitration
Arbitration is a type of alternative dispute resolution (ADR) method that parties may elect instead of traditional litigation. During arbitration, a neutral third party known as an arbitrator hears from the parties in much the same way that a judge does. The arbitrator will review the evidence and then issue a decision that is typically binding upon all parties.
Manhattan businesses often include arbitration clauses in their contracts that require the parties to submit to private arbitration before, or in lieu of, taking a dispute to court. There are numerous potential advantages to using arbitration to settle disagreements:
- Efficiency and speed: Compared to courtroom trials and related procedures that attend litigation, arbitration is less formal, faster, and it occurs in private.
- Subject-matter expertise: Arbitrators are typically experienced with the specific issues at stake between parties to a dispute, which enhances the quality of their decisions.
- Confidentiality: Since arbitration is conducted in private and away from public view, a company can maintain their professional reputation and sensitive business information can remain secret.
- Preserving business relationships: Extensive litigation can cost money and destroy long-standing business relationships, while the relatively faster and less costly arbitration process can protect them.
- Flexibility: Rules of evidence and other matters are fairly relaxed in arbitration, and scheduling is much less difficult.
- Finality: Arbitration decisions are final and leave very little room for appeal, which brings rapid closure to disputes so the parties can move on.
Court Versus Arbitration for Your Business Dispute
Ultimately, any business in Manhattan or elsewhere wants a quick end to business disputes so they can focus on generating revenue and meeting their other objectives. If your organization does have a dispute with someone, it’s important to realize how arbitration and litigation could affect it.
Arbitration
The goal of arbitration is to work out an effective remedy that is relatively quick, will preserve existing business relationships, and will save the parties time and money. It is ideal for situations that are relatively routine, although arbitrators are perfectly capable of developing solutions to novel problems. Arbitration is also very case-specific because the process can be customized to the wishes and needs of the parties involved.
Your organization will also benefit from having arbitrators who are experienced dealing with the precise issues at stake in your matter. This differs from the litigation process, in which a judge and jury who may have little or no business background will be making crucial decisions.
Litigation
There are some matters which parties simply cannot agree on by way of arbitration, and for them, litigation may be the more appropriate option. Litigation may involve lengthy discovery procedures, multiple hearings, and complex trials. But these steps may be necessary if the underlying dispute is novel, it involves complicated facts and multiple parties and witnesses, or the parties are wishing to set an important legal precedent.
Parties to a business dispute may also desire litigation because it is easier to enforce decisions across multiple jurisdictions. The transparency that necessarily goes with a public trial in Manhattan may also be warranted to hold a party accountable for its actions and defer future incidents of it. Lastly, the parties to a trial know that they have the right to appeal unfair or biased decisions.
Our Seasoned Business Litigators are Ready to Assist
When problems arise in business, you have choices for how to handle them. Our dedicated commercial litigators are ready to help you explore those options, and we can represent your best interests in either arbitration or litigation. Connect today with Levy Goldenberg LLP to get started.