Commercial arbitration becoming popular for resolving business disputes

For any business, the occasional misunderstanding can arise with suppliers, customers, employees or shareholders. Commercial conflict resolution is simply a part of business. And, like anything in business, efficiency, expediency and cost-effectiveness are important considerations. For many businesses, rather than resorting to commercial litigation, arbitration is becoming an increasingly popular means of resolving disputes.

Arbitration can have advantages over litigation

Arbitration is one of several forms of alternative dispute resolution that can resolve a business dispute outside the courtroom. While arbitration is an alternative to litigation, it does resemble the court process in some ways.

During arbitration, the parties present evidence to a neutral arbitrator, and agree to accept the decision of the arbitrator as binding. Arbitration can be advantageous for a number of reasons. Typically, it is speedier, less costly and dramatically simpler than litigation (although this is not always the case). Each party usually has a say in who the arbitrator or arbitrators will be, ensuring fairness. Unlike court where transcripts are generally a matter of public record, arbitration hearings are confidential. And, in most cases, arbitration rulings cannot be appealed, allowing the parties to move afterward without lingering uncertainty.

There are some potential drawbacks to arbitration. The finality of an arbitration ruling can be a double-edged sword, particularly if you are not pleased with the result. Arbitration is not always quicker or cheaper than litigation. And the venue for the arbitration, most often decided beforehand in the arbitration agreement, is not always convenient for all parties.

Recent Supreme Court case strengthened arbitration clauses

Despite the drawbacks, on the whole, arbitration is good for business, and it is quickly becoming a favored method of resolving business disputes. A recent Supreme Court case cemented the right of a company to compel arbitration when it had been previously agreed to.

In AT&T Mobility v. Concepcion, the Supreme Court decided that an arbitration clause proscribing litigation in favor of arbitration as the mandatory means of resolving a dispute that arose under the contract could not be invalidated simply because it contained a provision prohibiting class action lawsuits. Functionally, this case served as a powerful endorsement of the arbitration clauses that companies are increasingly including in customer agreements, employment agreements and supplier agreements.

Contact a business law attorney about your commercial dispute

Even though arbitration is not the same as commercial litigation, it is still important to go into arbitration with the right legal advocate by your side. An experienced business law attorney can present your case persuasively to an arbitrator, giving you the best shot at achieving the results that are right for your business.

If your business is involved in a dispute, talk to a business law attorney today.