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How Can You Avoid Litigation?
Legal disputes can be damaging to businesses in several different ways. They can drain your finances, hurt your reputation, and ruin your shareholders’/investors’ trust in your business. Luckily, there are ways to stop a legal dispute from seizing control or even going to court. Khalaf Bandar Law Firm offers several legal dispute resolution services.
For a law firm that’s ready to resolve any legal dispute you have, contact the team at Khalaf Bandar Law Firm. We’re here to help.
What is Litigation?
In business law, litigation is the process of resolving disputes, or reaching an agreement, through the court system. This means both parties must present their cases to Saudi Arabia’s civil court. The evidence presented may lead to a long and expensive process of communication between two parties.
As the dispute continues, your costs will increase exponentially and more information will be released to the public. Even if you end up winning the case, this has likely left your business with costly legal fees and a damaged reputation.
3 Types of Alternative Dispute Resolution Services
There are a few forms of alternative dispute resolution (ADR) used to resolve a legal dispute without having to go through litigation. The goal is to be private while also saving time and money. Ultimately, an ADR works to reach an agreement that satisfies each party’s wishes, given the situation.
There are three types of legal dispute resolutions before one enters litigation: mediation, arbitration, and consensual settlement.
Under Saudi law, mediation is a form of alternative dispute resolution that’s voluntary and confidential. This is a process where a neutral third party facilitates negotiations. The mediator helps both sides reach a fair agreement.
This process is typically more cost-effective and time-efficient compared to litigation. It also allows businesses greater control over the outcome since they can negotiate directly with the other party. In litigation, the court has the final say, and a business can only hope that the final decision is in its favor.
Furthermore, we cannot forget that mediation occurs behind closed doors. This protects the reputation and public image of both parties. They would not have this privacy during court proceedings.
Arbitration in business law is similar to mediation as a form of alternative resolution. They both seek to resolve disputes without going through the court proceedings of litigation. This also involves a neutral third party known as the arbitrator.
The difference between an arbitrator and a mediator is that the arbitrator makes the final decision. Mediators only try to help both parties agree, whereas arbitrators act as the court on the final decisions.
If you don’t agree with the arbitrator’s decision, you can choose not to agree to their decision depending on your arbitration contract. Some arbitration contracts do have clauses for binding decisions. This usually means you must go through a court proceeding. There, you will present similar arguments as you did in arbitration if you disagree.
Like mediation, arbitration also benefits from:
- Autonomy: Arbitrators act like a court, but you can choose who the arbitrator is and have a say in decisions. A business cannot choose who will be the judge in their case.
- Confidentiality: Privacy is always important when a business’s operations and trade secrets are at risk.
- Enforcement: If your arbitration agreement does not let either party challenge the arbitrator’s decision, that decision is final. This form of alternative resolution is a binding decision and is backed by Saudi Law.
If you or the other party think you won’t win in mediation, arbitration, or court proceedings, you both can suggest settling instead. This means that one party will agree to pay the other a certain amount of damages to quickly and quietly end the legal dispute before it gets any further.
The goal is for the party being sued to pay less than they stand to lose and for the suing party to receive enough that it’s not worth the risk of going to court.
The powerful thing about consensual settlement is that you can offer or receive an offer to settle at any time. No time restrictions exist. You can offer to settle and reach an agreement even before the final decision is given or within days of being served.
Contact the Attorneys at Khalaf Bandar Law For Help
Legal disputes can be a significant drain on the finances of any business, but with alternative dispute resolution services available, you can protect your business. With a consultation and more information about your circumstances, we can make suggestions about which ADR service is the best path forward for your business.