Even with the best prevention strategies and customer service, companies can face a variety of disputes, whether it is with a customer, vendor, business partner or employee. Sometimes the parties can resolve the issue on their own, but this is not always the case.

If negotiation attempts fail, there are other options that help resolve business disputes.

Litigation

Most people may think of a courtroom battle when it comes to resolving disputes. According to the Harvard Law School Program on Negotiation, litigation is the resolution type that is most familiar. Litigation consists of the plaintiff and the defendant, their attorneys, plus a jury and a judge or just a judge.

Each side presents their case and evidence to support it, and then the judge or jury makes a ruling. Information presented, as well as the verdict, is available to the public.

Alternative dispute options

As an alternative to litigation, the parties may decide to use mediation. A mediator, who is a neutral third party, helps both sides come to an agreement. The mediator listens to both sides, has conflict-resolution skills and offers creative solutions to the problem. Unlike litigation, the information presented in mediation is private and nonbinding.

Arbitration also uses a third party, but the arbitrator acts as the judge. The arbitrator makes a decision, which is binding, based on the information and evidence presented by both sides. The decision is typically confidential, and an appeal process is usually not available.

According to the American Bar Association, alternative resolution processes are popular because they are quicker and less expensive than court proceedings are. They also provide more flexibility and require fewer formalities.