5 ways small businesses benefit from alternative dispute resolution

When a conflict arises, small businesses may best be served through opting for alternative dispute resolution instead of litigation.

According to the U.S. Small Business Administration, small businesses in Georgia account for 97.7 percent of all the employers in the state. The majority of these companies - 81.9 percent - do not have any employees. Nonetheless, these organizations play a vital role to the state's economy.

As any small business owner knows, time and money are incredibly valuable. When a conflict arises, the cost of litigation can seem overwhelming. Fortunately, there is the option of seeking a method of alternative dispute resolution, such as mediation or arbitration. This enables the parties to work outside the courtroom to find a solution, which can benefit a small business in the following ways:

1. Providing options

Going through the alternative dispute resolution process enables a business to determine which course of action may be appropriate. For example, some contracts will demand that a case goes to arbitration, and in other circumstances, the parties could opt to go to mediation. In arbitration, a neutral party will have the final say. In mediation, the parties will sort out the final decision on their own.

2. Cost- and time-efficient

One of the most important items for business owners is the bottom line. In many cases, alternative dispute resolution will save money because it can bypass court fees and associated costs. Additionally, methods such as mediation can move quickly because it can take place when the parties choose to move forward rather than based on a court's schedule.

3. Flexibility

Alternative dispute resolution gives a business owner the flexibility to determine when meetings will take place. Instead of adhering to a court appointment - which could disrupt hours of operation - the parties may choose to meet at another time.

4. Greater autonomy

Another key benefit to using alternative dispute resolution is that the parties have a bigger say in the outcome. Commercial litigation in the courtroom typically focuses on one party "winning." Using mediation or another method, both parties can find some common ground and develop an agreement that could even provide mutual benefits.

5. Confidentiality

Processes like mediation are confidential, unlike the litigation process, which opens proceedings up to the public. It often behooves a small business to keep conflicts private, as even a hint of trouble could tarnish a company's reputation.

Employing alternative dispute resolution is especially prudent when the two parties plan on working together in the future. Working together on a solution can keep communication open and honest, enabling the parties to maintain a good relationship.

According to the U.S. Department of Justice, alternative dispute resolution is highly successful. Of the case reports submitted in 2015, 71 percent were resolved when the parties engaged in the process voluntarily.

Working with a professional trained in these methods can greatly benefit a small business. Anyone who has questions about this topic should speak to a commercial attorney in Georgia.