Business Law

718 Words2 Pages

Business owners and managers familiar with the court litigation system understand that high litigation costs and long delays make it difficult and expensive to resolve business disputes in court. They also understand that most civil cases that go to court are settled before trial. They are solved after spending considerable amount of time and money in the complex pre-trial phase, but just in time to avoid the risk of trial. Mediation and commercial arbitration provide superior solutions that help in resolving business disputes. Mediation puts the parties immediately in control of the situation and helps them get desirable outcomes without expending vast resources on litigation procedures (Berg, Permanent Court of Arbitration. International Bureau, International Council for Commercial Arbitration, 2005). Litigation is the process that involves bringing, maintaining and defending a lawsuit raised by the plaintiff against a business or organization or a person understood as defendant. Litigation is thorny, time-consuming, costly, and involves a risky process that must comply with complex set of rules. The risks that businesses and other organizations encounter while dealing with litigation are several. First, they face a probability of winning or losing. This is because it is not certain that one party must win. Secondly, the amount of money to be won or lost is not defines. Businesses organizations or people have the risk of getting little money than they expect. In fact, they could get little money than they have sent in the litigation process. The fees required by attorneys and other costs of litigation make the process considerably expensive. Another risk involves loss of productive time of the managers and other personnel as ... ... middle of paper ... ...rimarily the flexibility runs from innovation and ingenuity of the parties in developing their arbitration agreement. Because arbitration is a type of contract law, parties can construct the terms, agreements and parameters that they can use to handle arising disputes, in arbitration. Such flexibility is not possible in litigation (Antonio Buti, 2001). In conclusion, traditional litigation systems and arbitrary or alternative dispute resolution techniques offer ways of dealing with business disputes. However, litigation systems are expensive, time-consuming, and rigid and have many risks including lack of confidentiality. On the other hand, arbitration is less time-consuming, cheap and flexible because it allows parties to draft their own arbitration agreements. Therefore, arbitrary dispute resolution (ADR) techniques are preferable for businesses.

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