Small Business Dispute Resolution

Small businesses have increased challenges when it comes to resolving disputes with their vendors, clients, and employees.  They generally don't have a legal department to rely upon, and even if an attorney is retained, the risk of a damaged reputation exists, should the dispute go to court and the verdict become publicized through the media or in the professional circles.

Conflict takes the joy out of business. It may be challenging to know how to resolve disputes without compromising a valued relationship.  There are also times when no relationship exists, and resolution of the dispute is the only priority.   Mediation is a confidential processes that allows small businesses to address disputes in a less formal way, but still retain the enforceablility of a court order when agreement is reached in mediation.  When parties agree, a a signed Memorandum of Understanding, or MOU is drafted immediately, and when signed by the parties, it can be submitted to court for enforcement.

Contract Provisions for Mediation or Arbitration

Alternative Dispute Resolution clauses, also known as ADR provisions or clauses, are commonly written into business and commercial contracts. Most people have agreed to mediate or arbitrate whether or not they are aware of having done so. Examples include software and internet service agreements, real estate transaction contracts, phone service agreements, credit card and loan application agreements, etc.

Mediation resolves conflicts while preserving relationships.  Mediation is increasingly recognized as a preferred way to address disputes and to avoid litigation.  Mediation yields agreement in the vast majority of cases and is often a mandatory step prior to other binding processes such as arbitration or setting the date for final hearing in court.

Arbitration provisions in a signed contract require parties' participation in arbitration, thereby excluding a court hearing when parties have a dispute arising from the terms and agreements specified in the contract. Parties may also voluntarily submit a matter to arbitration in the absence of an arbitration provision when a dispute arises.

Specific Arbitration Rules:

USADR, Inc. offers low cost arbitration services.  Judy Larkins is the Case Administrator for the arbitrations filed with USADR.

Arbitration is a creature of contract, and parties may agree on many aspects of how the arbitration is conducted:  the specific rules of procedure, governing law (federal or state specific), where and how the hearing will be conducted, etc.

Sample Arbitration Clauses

A sample arbitration clause can be referenced at http://usadr.com/sample-arbitration-clause.

Recommended Use of Mediation after Arbitration is Filed

An estimated 85-90% of disputes filed for arbitration resolve before the hearing. For this purpose, USADR encourages parties to consider mediating prior to the arbitration hearing. 

Non-Use of Legal Proceedings Coinciding with Arbitration

Parties are prohibited from filing any legal action through the courts on the same disputed matters submitted to arbitration during the course of the arbitration hearing.