Take Care of Your Business Disputes Before They Get Out of Hand

Disputes between business associates can get out of hand quickly, and potentially spell the end for your business if not handled with the urgency and care they demand. These disputes frequently stem from disagreements about the future path of the business, or an owner acting in a manner which causes distrust between partners. However they may arise, resolving these issues in one way or another is critical to the health of your business. 

Arbitration or Mediation

These alternative methods of dispute resolution are becoming increasingly popular among business owners as a quicker and cheaper way to close out disputes. Both options provide a chance at resolving the issue without taking things to court by working with an independent third party to decide on how to continue. They may also cause less trouble for the business in the long run by keeping matters private and encouraging a more amicable solution.

Mediation involves the parties coming together before someone experienced in business issues and facilitating resolutions.  A mediator does not make decisions.  Instead, a mediator will identify and clarify points of contention between the parties and help craft a resolution to which they can both agree.

In arbitration, the parties follow a process to select someone who issues a decision in the dispute.  Much like a trial, the parties present their arguments and evidence, and the arbitrator makes a decision to which the parties are bound.  Unlike a trial, the dispute remains private and can be handled by an arbitrator with subject matter expertise.  The decision is then enforceable in court if necessary.

A well-crafted corporate governance agreement can address the potential for disputes and the process by which they are resolved, including mediation and arbitration.  This helps set the expectations and protections of parties with the appropriate dispute resolution mechanism.  Otherwise, alternative dispute resolution may not work because the cooperation of both parties is necessary to work through the process. 

Litigation

In the absence of an agreement or cooperation between the parties, the only solution for dispute resolution may be litigation. In such cases, an extensive understanding of the dispute and the issues that led up to it is necessary to prepare your case. Your first task should be to review any written agreements to see if there are established procedures that were not followed or obligations that were not fulfilled. Any clear violation of these written agreements gives an actionable point to your case and demonstrates that the other party acted in a way that may have been the root cause of the dispute. Litigation in business disputes is often very contentious, so working closely with your legal counsel throughout the discovery period to garner as much evidence of misconduct as possible will help generate a more effective case.

As difficult as these disputes are, resolving them as quickly as possible is crucial to protecting your business from ongoing issues caused by business associates who are at odds with one another. Your first step in resolving business disputes should always be a consultation with qualified legal counsel to figure out what options are available to you. Contact Baker Jenner LLP today to discuss what we can do for your business.

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Baker Jenner LLLP

Baker Jenner LLLP is a business solutions law firm. We partner with clients to achieve their goals while managing transactional, regulatory, and legal risks.
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