The vast majority of legal cases settle before going to trial.  Traditionally, in a civil lawsuit, the lawyers for each side would exchange settlement offers and counter-offers informally at various times throughout the lawsuit.  Their clients, the actual parties paying or receiving the money, were usually only involved secondhand.  In addition, the lawyers were oftentimes reluctant to extend the initial offer or demand, or change their initial offer or demand, because it may “signal” the other side of some weakness in their case.  So often what would happen is that the lawyers and clients would get geared up for trial, stand in the courtroom in front of a judge and ready to pick a jury, and the judge would ask if there had been any settlement negotiations.  The lawyers would (somewhat sheepishly) look at each other and adjourn with the judge in his chambers.  At that time, some real negotiation finally began. 

In the last few years, North Carolina has encouraged mediation for civil lawsuits.  In fact, it is required by court order in all but the smallest civil action.  Mediation takes that conference with the judge in chambers and makes it happen much earlier in the process.  The parties either agree, or the court will appoint, a neutral 3rd party mediator who is usually a practicing attorney or retired judge.  That mediator will not have any initial information about the dispute.  Sometimes the parties will send him some pre-mediation information, but usually he goes into the mediation knowing nothing.

On the day of the mediation, the lawyers and their clients will meet with the mediator.  More important sometimes than the actual Defendant, is somebody who is representing his insurance company, is required to attend.  That way the real decision makers are all present.  The Mediator will then briefly explain the process and allow both sides to give their side of the story.  Then the parties split up into different rooms.  The mediator will then go between the rooms carrying offers and counter-offers. 

Nothing said at mediation will be admissible at trial and if you tell the mediator something in the break-out room that you don’t want the other side to know, he won’t tell them.  This allows some free discussions and even some venting with the mediator and even the other side about the strengths and weaknesses of each party’s side of the case.  Oftentimes the mediator will raise or emphasize issues that the parties or even their lawyers haven’t considered.  Even the best lawyer can benefit from a fresh and removed perspective sometimes.  Usually mediation will take several hours and occasionally can take multiple days, but at some point, either the parties will agree to a settlement that the mediator will get in writing, or the mediator will declare an impasse.  At which point, the parties get back on the track for a jury trial, although nothing prevents them from settling among themselves at a latter time.  

If the parties and their lawyers see the case differently and settlement is impossible, mediation won’t magically make that happen.  However, if a case will settle (and again most of them should and do), the mediation will make that happen sooner, and save both parties time and legal expenses.  Even when the mediation ends in an impasse, the case may be resolved later because of information that comes out at the mediation.  At worst, you gain an idea of what the other side thinks is the strength and weakness of your case and your attorney can use that for trial strategy.  (For more on mediation, watch this excellent video).