What Happens in a Legal Mediation Proceeding?
Written by JGPC Business Law on June 27, 2017. Updated June 2026.
Legal mediation is a voluntary or court-ordered dispute resolution process in which a neutral third party helps opposing sides negotiate a mutually acceptable solution. Mediation is often faster, less expensive, and more flexible than litigation, making it a valuable option for resolving many business disputes.
There are several ways a California business dispute can be resolved, but litigation is usually not the preferred method for doing so. While many businesses will enter the courtroom to protect their rights, some businesses may consider litigation as a last resort when other methods of dispute resolution have failed. Not only is litigation expensive (some businesses will have to pay tens of thousands of dollars to their legal teams before the dispute even makes it to the courthouse), but it is time-consuming as well.
Mediation is a form of business dispute resolution available to business owners who find themselves at odds with a customer, another business, or some other person or entity. To understand if mediation is appropriate in your situation, it is helpful to understand what mediation entails as well as what your business mediation lawyer can do.
Defining Mediation and Beginning the Mediation Process
Mediation is a form of alternate dispute resolution (ADR) in which two parties with a dispute between them submit their dispute to a neutral, third-party mediator. The mediator’s task is to attempt to broker an agreement between the parties that will spare the parties from having to litigate the dispute in court. The mediator may do so by helping each party to appreciate the merits of the other party’s situation, while helping each party to appreciate the weaknesses in their own claims. A mediator may propose a solution to the parties, but no solution is binding unless all parties agree to make it so.
Mediation may begin with both parties agreeing to participate, or mediation may be ordered by the court overseeing the parties’ dispute. While either party may leave the mediation proceeding at any time, when mediation is court-ordered, there is usually an expectation that the parties will participate and attempt in good faith to reach an agreement.
What to Expect in Mediation
Parties participating in mediation will usually meet with the mediator in one or more sessions at a neutral location. While it is not common for parties participating in mediation to have their attorneys present in the room, the parties and mediator may agree to do so in certain cases. During the session(s), the mediator will attempt to initiate and sustain a dialogue between you and the other party or parties to reach a mutually agreeable resolution to the dispute. If such a resolution cannot be reached, the parties may then choose to litigate their dispute or attempt another method of ADR.
In a mediation proceeding, it is important to constantly look after your and your business’s well-being. A mediated agreement may save you money over litigation in the short-term but may negatively impact your business in the long-term. Before entering a mediation proceeding, speak with the experienced California business law legal team at JGPC Law. We will assist you in preparing for your mediation session and help you understand what resolution(s) would be best for your business. Our firm helps business owners in Oakland, Walnut Creek, Hayward, and Tracy and elsewhere in California. Contact our firm by calling (925) 463-9600 or by completing our online contact form.
Frequently Asked Questions
What is mediation?
Mediation is a form of alternative dispute resolution (ADR) in which a neutral mediator helps parties communicate, identify areas of disagreement, and work toward a voluntary settlement without going to trial.
What types of business disputes can be resolved through mediation?
Mediation is commonly used to resolve contract disputes, partnership disagreements, commercial lease conflicts, employment matters, vendor disputes, customer claims, and other business-related conflicts.
Is mediation legally binding?
The mediation process itself is generally not binding. However, if the parties reach an agreement and sign a settlement agreement, that agreement may become legally enforceable.
How is mediation different from litigation?
Litigation involves presenting a dispute to a judge or jury, who ultimately decides the outcome. In mediation, the parties retain control over whether a settlement is reached and the terms of that settlement.
Can a court require mediation?
Yes. In some cases, courts may order parties to participate in mediation before allowing the case to proceed further. Even when mediation is court-ordered, the parties generally remain free to accept or reject proposed settlement terms.
Do I need an attorney during mediation?
While parties may participate without legal counsel, many businesses choose to consult with or have an attorney involved in the mediation process. An attorney can help evaluate settlement proposals and protect the business’s legal interests.
What happens if mediation is unsuccessful?
If the parties cannot reach an agreement, they may pursue other forms of dispute resolution, including arbitration or litigation. Information shared during mediation is often confidential and generally cannot be used later in court.