Establishing a Foundation for Successful Negotiations in Mediation

In every commercial dispute the parties involved have a choice: invest substantial time and money asking a court or arbitrator to decide the outcome, or attempt to negotiate a business solution that allows both sides to retain greater control over the result. For those seeking the latter, mediation has become a valuable tool because it encourages practical problem-solving.

Mediation differs from litigation because the mediator does not impose a decision. Instead, the mediator facilitates negotiations and helps the parties evaluate risk, identify common ground, and explore potential settlements. Unlike arbitration, which generally ends with a binding award, mediation succeeds only when the parties voluntarily agree upon a resolution.

Byeongsook Seo of Snell & Wilmer summarizes the process by observing that mediation is a discussion designed to help disputing parties reach a resolution, even though no particular outcome is guaranteed. That flexibility is one of mediation’s greatest strengths because parties remain free to craft creative business solutions that courts may not be able to order.

Successful mediation, however, begins long before everyone gathers around the conference table. The strongest outcomes are usually achieved by parties who carefully evaluate their risks, select the right mediator, exchange meaningful information, and prepare realistic settlement objectives.

Choosing the Right Time To Mediate

While mediation can be effective at virtually any stage of a dispute, the likelihood of reaching a resolution often depends on whether the parties have enough information to make informed decisions and are genuinely prepared to negotiate in good faith.

In some cases, mediation is most productive before a lawsuit is even filed, allowing the parties to resolve their differences before incurring significant legal fees and business disruption. In other situations, limited discovery may be necessary so that both sides have a clearer understanding of the facts, the strengths and weaknesses of their legal positions, and the risks of continuing the dispute. There is no universal ‘right’ time to mediate; the appropriate timing depends on the complexity of the case, the information available, and the willingness of both parties to engage in negotiations.

Preparation and Risk Analysis

Before negotiations begin, each party should conduct an honest and objective assessment of both the legal and business risks associated with the dispute. That means looking beyond the strengths of your own case and realistically evaluating the potential outcomes if the matter proceeds to litigation or arbitration.

As part of this process, parties should weigh the best-case, expected, and worst-case scenarios, while also estimating litigation costs, the time required to resolve the dispute, potential business disruption, reputational concerns, insurance coverage, and the practical likelihood of collecting on any judgment.

Preparation also involves establishing clear settlement objectives before the mediation begins. Clients and counsel should identify who has settlement authority, determine realistic negotiation parameters, and discuss the business priorities that will guide decision-making during the mediation. Addressing these issues in advance helps avoid unnecessary delays and ensures that the parties can respond thoughtfully as negotiations evolve.

Selecting the Mediator

While credentials and experience matter, they are only part of the equation in selecting a mediator. An effective mediator should also have relevant industry knowledge, a solid understanding of the issues at the heart of the dispute, and a communication style that inspires confidence from both sides.

It is equally important to consider the mediator’s approach.

• Some mediators take a facilitative role, helping the parties communicate more effectively and identify common ground without expressing opinions on the merits of the case.
• Others take a more evaluative approach, offering frank assessments of the strengths and weaknesses of each side’s legal position.

Neither style is inherently better; the most effective choice depends on the nature of the dispute, the personalities involved, and the parties’ expectations for the mediation.

Beyond legal expertise, successful mediators excel at managing people. Business disputes often involve damaged relationships, strong emotions, and communication breakdowns that can make productive negotiations difficult. A skilled mediator recognizes these interpersonal dynamics, adapts to the personalities in the room, and keeps discussions focused on finding practical solutions rather than revisiting past grievances.

Before selecting a mediator, counsel and their clients should also consider factors such as availability, prior mediation experience in similar matters, reputation for fairness, and the ability to build credibility with all participants. Investing time in selecting the right mediator can significantly improve the likelihood of reaching a negotiated resolution and avoiding the cost and uncertainty of continued litigation or arbitration.

Mediation Statements and Confidentiality

Well-prepared mediation statements can significantly influence the effectiveness of the mediation before the parties ever meet. These submissions provide the mediator with the factual and legal background necessary to understand the dispute, identify the key issues, and begin evaluating potential paths toward resolution. Depending on the circumstances, mediation statements may be exchanged with the opposing party, submitted confidentially to the mediator, or divided into both a shared statement and a separate confidential submission.

An effective mediation statement should clearly explain the relevant facts, legal claims and defenses, damages, procedural history, prior settlement discussions, and any business or personal considerations that may affect the negotiations. Just as importantly, it should help the mediator understand each party’s objectives and the obstacles that may stand in the way of settlement. Providing this context in advance allows the mediator to spend less time learning about the dispute and more time facilitating productive discussions once the mediation begins.

Confidentiality is equally essential to a successful mediation. Parties are often willing to discuss settlement options, acknowledge litigation risks, or share sensitive business information only because they trust that those communications will remain confidential. Leslie Berkoff of Moritt Hock & Hamroff LLP emphasizes the importance of establishing clear mediation agreements that define the mediator’s role, outline the scope of confidentiality, and set expectations for how the process will be conducted. Those agreements should also address practical issues such as remote participation, unauthorized recordings, and, increasingly, the use of artificial intelligence tools that could compromise confidential communications or mediation materials.

Ultimately, confidentiality fosters the trust that allows parties to negotiate candidly and explore creative solutions without concern that their settlement discussions will later be used against them.

When Mediation Does Not Settle

Mediation should be viewed as an ongoing process rather than a single event. Many commercial disputes settle days, weeks, or even months after the formal mediation session concludes. Through candid discussions with the mediator and the opposing party, participants often develop a clearer understanding of the strengths and weaknesses of their case, gain insight into the other side’s priorities and concerns, and identify the legal or factual issues that are truly driving the dispute. Even when a settlement is not reached, mediation can narrow the issues in dispute, streamline future discovery, and help both sides reassess the risks and costs of continuing litigation or arbitration. Parties can leave the session with a better appreciation of the practical realities of their dispute, allowing them to revisit settlement discussions with more realistic expectations.

As parties have time to reflect on the discussions, evaluate the mediator’s feedback, and consult with key business decision-makers, their willingness to compromise often changes. For that reason, it is recommended to keep the mediator engaged after the session ends. A mediator can continue to facilitate discussions, communicate proposals, and help bridge gaps that may have seemed insurmountable during the formal mediation.

Final Thoughts

Successful mediation is a process that begins well before the parties ever meet and, in many cases, continues long after the formal session ends. By carefully evaluating legal and business risks, selecting the right mediator, exchanging meaningful information, preparing thoughtful mediation statements, and establishing realistic settlement objectives, parties put themselves in the best position to reach a practical and cost-effective resolution. Even when a settlement is not reached immediately, the process can clarify the issues in dispute, improve communication, narrow the scope of future litigation, and create momentum for continued negotiations.

To learn more about this topic, view Preparing for Mediation: From Selection to Presentation of Claims. The quoted remarks referenced in this article were made either during this webinar or shortly thereafter during post-webinar interviews with the panelists. Readers may also be interested to read other articles about alternative dispute resolution. 

This article was originally published on July 9, 2026.

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