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Using arbitration to settle tech company disputes

When you start a company, you likely do not think about the downsides or struggles you might face if things do not go right. For most companies, relationships with other businesses are vital. This means taking the time to work out deals, negotiate terms and memorialize this agreement in writing. While this helps to ensure that these terms are followed and continually met, this does not mean breaches cannot happen. When a dispute arises, businesses need to determine the best route to resolve them. For some, this means going through arbitration.

For tech companies, the idea of going through litigation for high-stake matters meant facing the high costs associated with this matter. Disputes arising within and among tech companies carry a high price tag, often costing these companies millions of dollars. What made matters even worse was the fact that judges and juries without specific expertise on these tech matters were making decisions that were often unpredictable and tenuous.

As a means to drive down these costs, tech companies found arbitration to be a better option. There are some significant benefits to enjoy by choosing this option over litigation. The top three problems with litigation is the time, money and the inexperienced and unqualified judges deciding the matters. The benefits associated with arbitration include expert decision-making, timely resolutions and the increased privacy of the matter.

Because many cases do settle, corporate counsels do not often consider factors such as time, costs and the unpredictability that litigation can bring to the table. Additionally, there are many capable state and federal judges that can decide these matters. However, when it comes to very detailed and complex tech matters, this is where expertise can be extremely valuable. Understanding other legal options, such as arbitration, can be extremely beneficial for companies dealing with business disputes.

Source:, "Arbitration Has Significant Benefits for Tech Company Disputes," Nov. 9, 2017

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