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Is arbitration right for every business dispute?

On Behalf of | Aug 25, 2021 | Business Law

These days, it is not unusual for business owners across the country, including those in Ohio, to consider alternative dispute resolution methods. In particular, including arbitration clauses in business contracts to ensure that any dispute is resolved with this method rather than litigation is not usual. However, before company owners consider this method the best for their particular company, they may want to think about the downsides. 

While arbitration can certainly have its benefits, such as increased privacy due to a lack of public record and courtroom litigation, it is not a one-size-fits-all conflict resolution method. In fact, the privacy of arbitration comes from the fact that the sessions are typically not recorded in any format, unless otherwise agreed upon by the parties involved. While this may seem appealing at first, it can make disputing something that happened in the sessions more difficult because there is no record of it. 

Additionally, because the arbitrator has the final say in the outcome, his or her personal view may create a bias, even if the person has no direct connection to the parties involved. Some common issues that may make this dispute method less reliable include the following: 

  • Fewer evidentiary rules than those necessary for litigation, meaning potentially unreliable evidence could still be considered admissible 
  • Limited review options for the decision made by the arbitrator 
  • Difficulty having an arbitrator’s decision overturned 

While arbitration may certainly suit the needs of some business owners, it may be worthwhile to consider other options before agreeing to arbitrating every dispute that may arise. If Ohio business owners are having difficulty deciding between this dispute resolution method and litigation, it may be useful to discuss the specifics of the situation with experienced business law attorneys. Gaining applicable insight may help in the decision-making process.