Litigation vs. Arbitration in New York: What’s Best for Your Business Dispute?

Business disputes can often be resolved through informal discussions, but what can you do if negotiations fall apart? When it comes to solving complex problems, many businesses must decide between litigation and arbitration as options.

The challenge that a business owner has when making a decision between arbitration and litigation is that the options are quite dissimilar from one another. The Knox Law Group guides clients through both of these options. Here is what you need to know about both litigation and arbitration.

Is ADR Required to Resolve Business Disputes?

Alternative Dispute Resolution (ADR) is mandatory for certain disputes between businesses. Review the language in any contract your business is involved in to make sure that ADR is not required. This means that mediation or arbitration are possibilities.

Even if ADR is required by the contract, you should consider whether your dispute lies outside the terms of the agreement. Many commercial contracts include exceptions for different types of disputes. What’s more, some disputes will contain issues that aren’t conceived of in the mandatory ADR provisions. Those subjects can be litigated if you are unable to settle via informal negotiations.

What to Consider When Resolving Disputes via Arbitration

In arbitration, a neutral third-party arbitrator (or group of arbitrators) ultimately makes decisions in the case. The arbitrator will hear arguments and consider evidence supplied by both parties. A binding decision is then issued that is only appealable in specific circumstances.

Think of an arbitration hearing like a mini-trial. Testimony from the parties involved in the dispute, expert witnesses, and documentary evidence may be considered. Arbitrators frequently play a more active role than a judge in terms of asking questions or reviewing evidence.

The benefits of arbitration are that it is generally faster and less expensive than litigation. At some point in the process, both sides must agree to arbitration for that to become an option. Many times, the restrictive discovery process works against one or both parties, as well. Consult with an experienced NYC commercial disputes attorney to determine whether arbitration is the best or only option for your business.

Considerations for Resolving a Dispute Via Litigation

The litigation process begins when the aggrieved party files a complaint in court. From there, the responding defendant may assert its own counterclaims along with an answer to the original lawsuit.

Commercial litigation is heavy on discovery. Expect to need to turn over voluminous pages of documents, and for requests to be sent out for the opposing party to do the same. This ensures that no detail is overlooked when building a case, both for litigation itself as well as negotiations prior to a trial.

Litigation outcomes are subject to appeal. A trial court judge issues rulings that may include injunctions, damages, special performance, or other remedies.

The Knox Law Group Is Ready to Answer Your Questions

Need information to begin building a case on behalf of your business? Facing a commercial dispute and not sure if arbitration or litigation is the better option? Contact the Knox Law Group for a consultation regarding these important subjects.