Mediation
A voluntary dispute resolution process where a neutral third party helps opposing parties negotiate a mutually acceptable settlement.
Mediation is a structured negotiation facilitated by a trained neutral mediator who has no authority to impose a decision. The mediator helps parties communicate, understand each other's interests, and explore settlement options—but any resolution must be agreed upon voluntarily by both parties. If mediation succeeds, the parties sign a binding settlement agreement; if it fails, litigation continues.
Mediation is faster, cheaper, and more private than trial. A full mediation day typically costs $3,000–$10,000 (split between parties) versus tens or hundreds of thousands for prolonged litigation. Mediation success rates are high—70–85% of cases settle on the day or shortly after.
Many courts mandate mediation before trial, and some contracts include mediation as a required pre-litigation step. Unlike arbitration, the mediator does not decide the case—the parties decide for themselves.
Real-World Example
Rather than spending $40,000 on a trial, the business partners agreed to mediation; the mediator helped them reach a $75,000 buyout agreement in one eight-hour session.