Arbitration vs. Litigation: Which Path for Your Contract Dispute?
Disputes between parties to a contract are an unfortunate yet common reality in the business world. While no one wants them, being prepared is key. One of the best antidotes, as explained by experienced business lawyer Phil Crowley, is to have clearly written contracts that anticipate potential problems and establish a mechanism for resolution.
Many business owners are understandably wary of litigation due to its potential cost and complexity. In this video, Phil Crowley, founder of Crowley Law LLC, discusses arbitration as a viable alternative dispute resolution (ADR) method that can be specified within your contracts.
Key Insights: Understanding Contract Disputes & Arbitration
Key insights from this video include:
The Inevitability of Disputes: Be Prepared
Acknowledge that disagreements can and do happen.
Proactive Contract Drafting: Your First Line of Defense
The importance of foresight in your agreements to manage potential conflicts.
Arbitration: A Faster, More Affordable Path to Resolution
While not a perfect substitute for litigation in every scenario, arbitration can be particularly effective for:
- Contracts of relatively low monetary value.
- Situations where work needs to be completed quickly.
- Providing a potentially less expensive and faster forum for resolving disputes compared to court battles.
Crafting Effective Arbitration Clauses: Phil’s Approach
Phil shares his typical approach, specifying the need for:
Single Arbitrator: Streamlining the Process
A single arbitrator (to streamline the process).
Experienced Arbitrator: Ensuring Fair & Informed Decisions
An arbitrator with at least 10 years of experience in dealing with business disputes. This ensures the decision-maker is external, possesses relevant business knowledge, and is focused on finding an equitable solution.
Strategic Dispute Resolution: Your Business Advantage
By incorporating well-thought-out dispute resolution clauses, such as provisions for arbitration with qualified arbitrators, you can create a more predictable and manageable process for handling conflicts when they arise.
