Arbitration for Florida Breach of Contract: Pros and Cons
Written on November 16, 2020
Florida business owners frequently encounter contract disputes and related conflicts, but they do not always immediately resort to a court action for breach of contract. Even when litigation is an option, many choose to resolve contractual disagreements through alternative dispute resolution, including a specific type of ADR known as arbitration. As compared to going to trial, there are multiple benefits of working with the American Arbitration Association, CPR, JAMS, or other arbitration group. Of course, at the same time, there can also be multiple disadvantages that could have harsh implications for your company.
When arbitration is an option for resolving a breach of contract in Florida, it is wise to consult with your Clearwater, FL business litigation lawyer to assist you in making an informed decision about your situation. You might also review some of the pros and cons of arbitration to put things into perspective.
Consider the Advantages of Arbitration
When the parties can incorporate mutually beneficial procedural rules for arbitration proceedings, there are multiple factors that can prove advantageous over going to court.
Control and Certainty: Arbitration rules typically allow the parties to draw up procedures that are suitable for the contractual dispute, including rules regarding:
- Selection of the individuals who will serve as members of the arbitration panel;
- Limitations on the amount or nature of the award;
- What evidence is admissible at arbitration;
- Who will testify; and,
- Many others.
Time and Cost: Relaxed rules of pleading and evidence mean the arbitration can be less time-consuming and expensive compared to the trial process.
Privacy: If you take a breach of contract to court, the proceedings are public record. By engaging in arbitration that includes rules on confidentiality, you can keep the matter private – thereby protecting your company’s reputation.
Be Cautious of Arbitration Pitfalls
In other situations involving breach or contract disputes, arbitration is not the best fit and could present substantial problems.
Finality: The decision by the arbitration panel is usually final, so it is rare that you will have any option to appeal, set aside the order, or seek other legal remedies.
Discovery Challenges: Because the proceeding is not before the judiciary, the parties have little power to force turnover of documents. Despite including provisions on discovery rules, an uncooperative party may refuse to provide materials – thereby harming the integrity of the arbitration proceeding.
Lack of Procedural Safeguards: Parties may see the informality of arbitration is a plus, but there can be drawbacks. You may not be able to use technical defenses, such as expiration of deadlines in the contract or the statute of limitations, because the arbitration is not a court proceeding.
Discuss Pros and Cons of Arbitration with a Clearwater, FL Business Litigation Attorney
This summary of arbitration may be helpful in terms of the bigger picture, but it is essential that you understand how the pros and cons might apply to your unique circumstances. For custom-tailored legal advice, please call Clearwater Business Law at (727) 785-5100 to set up a consultation. Our business law attorneys represent clients throughout Pinellas County in a wide range of corporate matters, including arbitration for breach of contract.