Benefits of Alternative Dispute Resolution for Commercial Cases

Intellectual property

In the 1980s executives and legal experts began discussing the potential of alternative dispute resolution (ADR). It could be a much more cost-effective method of settling disputes that kept companies out of courtrooms and would prevent the types of litigation and settlements that could devastate both the claimants and the defendants.

Over the course of a few years hundreds of large commercial cases went through the ADR process and many corporations reported significant savings of both time and money. To reap the greatest benefits from the process it is necessary for those involved in commercial cases to seek out effective neutral mediator that actively work to preserve and improve relationships, stay within the confines of the contractual agreements, and who are efficient and capable or resolving disputes quickly.

Better Relationships

One of the most frequently overlooked benefits of using a mediation or arbitration service is that powerful impact it can have in strengthening or repairing a professional relationship which was damaged by the dispute. These services provide a less public option for resolution that is also typically less stressful for all parties.

When commercial cases enter the legal system, it is necessary for more people to become involved and the focus can be on winning rather than on resolving the issue with civility. Arbitration and mediation encourages those involved to show up as their best selves with a determination to reach a resolution within the confines of the agreements set forth by both parties.

Protects Time and Money

It is unusual for people to fully understand the time and financial costs associated with bringing commercial cases into the judicial system. Regardless of who wins there will be substantial legal fees, court fees, and various other expenses. This can be especially devastating when commercial cases are brought to trial for something that ultimately could have been resolved if the two parties had been more willing to give each other the benefit of the doubt and attempted to work together.

The time investment in the legal process has grown dramatically over the past several decades. It can take years for commercial cases to come to trial by which time each side is so heavily invested in winning that they may refuse to negotiate. In contrast, mediation or arbitration can be resolved in days or weeks in some instances.

An experienced mediator can play an invaluable role in resolving commercial cases through arbitration rather than litigation. In 1962, more than 11% of federal civil cases went to trial while today the number is closer to 1%. ADR can help ensure that the number of commercial cases which reach federal court is also greatly reduced.

The following two tabs change content below.
Sarah Todd

Sarah Todd

Sarah Todd, an investment banker, is a reporter and researcher for one of London’s leading media outlets. Formerly a trader and market maker at FTSE, she turned to media during the global recession. This website features some of her best and favourite articles, from all parts of the business world. Please let her guide you and your enterprise along the path to prosperity.