Commercial mediation: what to expect before, during and after the day

Pre-action conduct rules in England and Wales require parties to consider alternative dispute resolution before issuing proceedings. A party that unreasonably refuses to mediate can face costs consequences even if it wins, and the Court of Appeal has confirmed that courts can order parties to engage in ADR. Mediation is therefore a step to take seriously, not a formality.

The parties agree on a mediator, often an experienced lawyer or specialist in the relevant field, and sign a mediation agreement setting out confidentiality, fees and who will attend. Mediator fees are typically shared equally unless agreed otherwise.

Each side usually prepares a short position paper summarising the dispute, its case and key documents, and exchanges it with the other side and the mediator. Preparation also means working out privately your best and worst realistic outcomes, what a court case would cost in time and money, and who must be present with authority to settle.

Mediations often begin with a brief joint session where the mediator explains the process, although many now go straight to separate rooms. The mediator then moves between the parties, exploring each side's position privately, testing strengths and weaknesses and carrying offers.

Anything you tell the mediator in private remains confidential unless you allow it to be shared. Expect progress to feel slow in the morning and faster in the afternoon, as the realities of cost and risk come into focus. Settlements frequently emerge late in the day.

If the parties agree terms, they are written into a settlement agreement and signed before everyone leaves. Once signed, it is a binding contract. Settlements can include things a court could not order, such as revised supply terms, an apology, future work or a structured payment plan.

Make sure the agreement deals with every issue, including costs, confidentiality, timing of payments and what happens to any existing claim.

Not every mediation settles on the day. Even then, the gap has usually narrowed, and many disputes settle in the days or weeks afterwards as parties reflect. The confidentiality of the mediation continues, so the other side cannot rely on your offers in court.

Bring someone with genuine authority to settle. Be clear about your priorities, not just your legal arguments. Listen to the mediator's reality checks. Have the settlement terms ready to draft, so that agreement can be recorded promptly. We prepare clients for mediation and support them on the day as part of our dispute resolution work.

Each party should send someone with real authority to agree terms on the day, together with anyone whose knowledge of the facts or figures is needed, and its legal adviser if it has one. If a settlement needs board or insurer approval, arrange in advance for that person to be available by phone. Keeping the team small helps discussions stay focused, and it is sensible to agree beforehand who will speak for the business.