Many small business owners/managers ignore all clauses other than the description of products, shipping terms and payment terms. Many are shocked to be reminded that the dispute arising from the contract will be resolved throught arbitration at time of filing a lawsuit. Even if there is no arbitration clause in the contract, Florida Statutes provides that, “A court, pursuant to rules adopted by the Supreme Court, may refer any contested civil action filed in a circuit or county court to non-binding arbitration.”
What does arbitration mean to small business owners/managers? Arbitration is a type of alternative dispute resolution (ADR) where a neutral third party, called an arbitrator, listens to both sides of the argument and makes a binding or non-binding decision.
Speed of Resolution
Arbitration is known for quicker resolutions, often wrapping up within a few months. Litigation, on the other hand, can stretch over years due to court schedules and the multiple stages involved, including discovery and trial.
Cost
While arbitrator’s fees can be significant, the overall expenses are generally lower for two reasons. One is that arbitration provides limited discovery which generally is the most costly process in litigation. Another reason is that it takes less time on processes, such as back and forth motions and hearings, settlements, which racks up cost.
Confidentiality
SinceLitigation is public record, confidential business information is exposed, whereas artibitratoni provides a confidnetial settings where details are not disclosed to the public. Arbitration can be especially beneficial to companies where confidentiality of business information is crucial.
Simpler Procedures
In arbitration, the rules are less daunting because they are less stringent, not like litigation where strict procedural reles make the process more structured.