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Mediation versus litigation, which is best?

On Behalf of | Nov 16, 2023 | Commercial Law

If you and your Texas business partner are involved in a dispute, you both may have a lot at stake. Likewise, if the problem is not with a partner but an entity with whom you have entered a contract, it is a benefit to everyone to resolve the matter as peacefully and swiftly as possible. Litigation is always an option, but there may be alternatives, including mediation, that demand less time and are easier on your wallet.  

Mediation is an alternative dispute resolution process that is particularly helpful to business owners who wish to avoid confrontation and would like to resolve an issue without going to court. To be successful, all parties must agree to commit to discussions. Each participant gets to speak, and each must listen (and not interrupt) while others are speaking, as well.  

Mediation occurs in a private setting 

If your company is well-known among the public, you might want to keep a serious legal dispute out of the limelight. If you take the issue to court, it becomes a matter of public record. On the contrary, all discussions that take place during mediation sessions are confidential. Mediation is private and takes place in a calmer, more relaxed setting than a public courtroom.  

There are no rules regarding how many mediation sessions you can have. However, you might set a date ahead of time as a deadline to determine whether mediation is working or whether you wish to convert the case to litigation. Mediation typically takes a lot less time than a court battle and is usually the most economically feasible option available.  

Additional alternative resolution dispute options 

In addition to mediation, you may decide to use arbitration to settle a business dispute. An arbitrated ruling is legally binding. This process also takes place out of court. However, it is more like litigation than mediation because a panel of arbitrators listens to both sides of a dispute, then makes a final decision. In mediation, you and the other party discuss your disagreement and try to find common ground on which to achieve a settlement.  

When you choose to arbitrate a case, it is much like a courtroom setting, where each side presents a case, which may include witness testimony, as well. Each side must be aware of the other side’s witnesses ahead of time.  

Determining which form of dispute resolution best fits your needs 

The success and well-being of your Texas business might hinge on dispute resolution. It is important to understand what options are available, then determine which one, either mediation, arbitration or litigation, will help you accomplish your goals.