There are different avenues through which you can seek compensation in case of a business dispute. Arbitration and litigation are two of the most commonly used options. However, as with anything to do with business, it's important to consider the costs associated with exploring either of these options.

The decision of whether to pursue arbitration or litigation isn't just about the cost but also the potential benefits. Those involved have to consider which of these options offers the most benefits to them.

What are the Benefits of Arbitration?

Arbitration is frequently touted as a cheaper alternative to litigation. This is true, and this is mainly because arbitration takes a much shorter time. Additionally, many established attorneys have also started to offer arbitration services.

Although this has significantly raised the cost of arbitration, it also means that the quality of arbitration services is quite high, and many businesses are moving towards arbitration to sort out their disputes.

The flexibility of arbitration is also a major selling point. With litigation, you'll need to align your schedule with court dates, and this can be challenging, but this isn't the case with arbitration. The arbitration sessions are also private, so the general public doesn't have to find out what's happening.

What are the Benefits of Litigation?

One of the biggest problems with arbitration is that one party may have an unfair advantage over the other. Therefore, it can easily become a take it or leave it situation. With litigation, neither party will hold this kind of power over the other.

The lack of transparency in arbitration can also work against it. The process can be extremely unfair, and if the ruling is unjust, the party that is disadvantaged may not be able to seek recourse in a court of law. In a court of law, there is usually recourse if a ruling is considered unjust.

Which Option Can Get You More Money?

If you only consider the highest possible outcome, litigation can get you more money in most cases. This is because the selection process of arbitrators isn't as transparent as that of appointing a judge in a court of law.

Since the large company or business may be a regular customer for the arbitrator, their ruling, even if in your favor, is unlikely to ask the party with deeper pockets to pay an obscene amount of money. In business litigation, the judge is more likely to make a judgement based purely on the facts.

For more information, contact a local business litigation attorney.