Arbitration
Like mediation, arbitration is a faster and less expensive way to resolve a business disagreement. Unlike mediation, the decision of an arbitrator can be legally binding (although not always). Also, unlike mediation, the process of arbitration is similar to that of a court proceeding. Witnesses and evidence may be presented.
Arbitration has served as an effective business tool for decades. One study found that 90 percent of corporations surveyed had used mediation or arbitration and strongly preferred them to using lawsuits.
What are the most common types of business disputes that are resolved using arbitration?
Collective bargaining agreements have included arbitration clauses for many years. Arbitration is frequently used in compensation and employment issues.
Can arbitration be specified in advance as a way or resolving a conflict?
Yes, almost any contract can include a clause stating that disagreements will be resolved by arbitration. When you are drawing up a contract with a supplier or customer, you can specify arbitration as the way to resolve a disagreement.