Making Mediation Work Before the Dispute Goes Back to Court

Editor’s Note: Most business disputes end in a deal, not a verdict. That is not a guess. Exposed to the full cost and unpredictability of litigation, the vast majority of parties choose settlement long before a judge or jury can weigh in. Mediation is the mechanism designed to make that happen, with structure and with someone in the room whose only job is to help the parties find terms both sides can live with. It is different from arbitration, which merely replaces a court with a private decision-maker. And it is not a miniature trial. The dispute is the same, the law is the same, and neither side walks in planning to concede. But the objective shifts. Instead of asking only who is likely to win, each party must ask itself whether the deal available today is better than the time, cost, and risk of chasing a potentially better result in court. This article is a practical guide about mediation, from the preparation that begins before the mediation date and continues until the final term is written, which locks the deal down.

Prepare Before the Negotiation Starts

Once the mediator is selected and the date is fixed, the useful work begins. Pre-mediation preparation can help counsel identify the real obstacles before everyone spends a day trading numbers.

A pre-mediation call can be used to explain the dispute, isolate the legal and factual issues, and identify practical barriers to settlement.

Leslie Berkoff of Moritt Hock & Hamroff LLP may use a joint call for logistics, then speak separately with counsel after reviewing the parties’ submissions. That second conversation can reveal concerns that never appear in a written statement and can help the mediator understand what is actually blocking a deal.

Choose the Format That Fits the Dispute

A joint session brings the parties and lawyers together with the mediator. A caucus separates the sides so each can speak privately with the mediator. Shuttle diplomacy is the back-and-forth that follows, with the mediator carrying offers, questions, and only the information that a party has authorized for disclosure.

Byeongsook Seo of Snell & Wilmer generally avoids substantive joint sessions in commercial cases. “I don’t want to do joint sessions for the most part,” he said. His concern is practical: if direct negotiation has already failed, another face-to-face argument can make the parties dig in further.

Berkoff is less interested in a fixed formula. “No one should ever have a hard, fast rule. Every mediation should be treated on its own.” In one matter, a joint discussion may clear up a factual misunderstanding. In another, it may make settlement harder before bargaining has even started.

Do Not Turn the Opening Into a Trial Speech

A courtroom opening is built to persuade a judge or jury. A mediation opening serves a different purpose. It can explain the case, put difficult facts in context, and let the opposing decision-maker hear the argument directly instead of through pleadings or someone else’s summary.

Tone is critical. Threats and litigation-style attacks can make the room defensive before meaningful negotiation begins. A more useful approach is to explain why the client believes in the case while still recognizing that litigation carries uncertainty.

Counsel should also decide whether the client should speak. A credible client who knows the record can change the other side’s view of witness risk. A client who is angry, unprepared, or unable to stay focused can have the opposite effect. Seo put it simply: “The messaging is key.” In a technical case, that message may be better delivered through a clean visual or a plain-English explanation than through another round of legal argument.

Let the Mediator Pressure-Test the Case

The mediator is not there to validate either side’s demand. The parties should be ready to examine the governing law, ask how the facts fit that law, and consider whether a claim or defense is likely to survive motion practice. Those questions matter because the settlement value depends not only on the amount claimed but also on the risk that a court may narrow or dismiss the case before trial.

A private caucus is also a useful place for the client to engage. The mediator can ask questions and test assumptions without turning the exchange into a cross-examination. Counsel should listen carefully. A client may explain a fact differently to a neutral, reveal a misunderstanding, or show how that person may come across as a witness. That information can be useful even if the case does not settle that day.

Use the Waiting Time

When the mediator is in the other room, the silence can feel unproductive. It often is not. Seo recommends using the pause to debrief: What did the mediator ask about? Which fact drew attention? Did the mediator seem concerned about a legal issue? What should be said when the mediator returns? A long absence may simply mean the mediator is doing difficult work with the other side.

The practical details matter too. Bring something to read or work on, eat, and do not schedule a flight or another commitment that forces an early departure. Mediation can become more productive late in the day, after both sides have had enough time to test assumptions and reconsider what they thought the case was worth that morning.

Virtual Mediation Needs Its Own Ground Rules

Remote sessions can solve travel and scheduling problems, but they create a different set of risks. Testing technology in advance, using secure breakout rooms, and setting clear expectations for privacy and screen use can reduce avoidable distractions.

Body language is also easy to misread on screen. Looking down to take notes may appear dismissive. Turning off a camera can look like someone has left. People outside the camera frame can raise confidentiality concerns. Jeffrey Zaino of the VERITEXT LEGAL SOLUTIONS summed up the topic neatly: “We could do a whole program on virtual versus in-person.” The point is not that one format is always superior. Counsel simply needs to manage the risks associated with the selected format.

Before Walking Out, Revisit the Risk

When bargaining stalls, three familiar negotiation concepts can bring the decision back to reality: BATNA, the Best Alternative to a Negotiated Agreement; WATNA, the Worst Alternative; and LATNA, the Likely Alternative. The extremes are useful, but the likely result usually provides the client with the clearest basis for deciding whether to continue negotiating or leave.

That calculation should go beyond attorneys’ fees. Litigation consumes management time, interrupts business planning, and can leave money and attention tied up in a dispute for years. A mediation can significantly limit these costs. An excellent article on this in the context of divorce is Mediation vs. Litigation in High-Asset Divorces: A Cost-Benefit Analysis by Kate Leifeld.

No Deal Today Does Not Mean the Process Failed

Some disputes need time after the first session. The parties may need another document, another conversation, or simply a few days to reassess the risks they heard in caucus. Even without a signed deal, the day should leave counsel with a sharper view of the witnesses, discovery, litigation expenses, and the issues most likely to drive a later settlement.

That is why the closing minutes matter. If there is no agreement, identify what happens next and keep the path back to negotiation open. If there is a deal, do not rely on memory.

If There Is a Deal, Put It in Writing

A term sheet should record the material settlement terms with as much specificity as the circumstances allow. The purpose is simple: a late-night agreement should not become a next-day argument over what each side thought it accepted.

Mediation does not require either side to abandon confidence in its case. It requires both sides to compare the cost and uncertainty of continuing the fight with the value of ending it. The better question is usually not whether the client can win. It is whether the likely result, after the expense, delay, and disruption required to reach it, is better than the resolution available now.

To learn more about this topic, view “Conducting the Mediation”. The quoted remarks referenced in this article were made either during this webinar or shortly thereafter during post-webinar interviews with Financial Poise Faculty. Read more about alternative dispute resolution on Financial Poise.

This article was originally published on [September 22, 2026].

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