When No Deal is No Big Deal: The Hidden Gems in Unsettled Mediations

Written by:  Hon. Victoria Wood (Ret.) 

 June 19, 2025

It’s so disappointing when a case doesn’t settle in mediation. The parties are bummed. The attorneys are bummed. And, yes, we mediators can often also feel very bummed. Not just because it hurts our prized settlement track records. We do this work because we are driven to help put an end to conflict. We thrive on resolution and take great pride in that palpable sense of relief everyone has when “the ink is dry” on a well-crafted settlement agreement. 

But the reality is that some cases are simply not in a posture to be settled on the day of mediation. With the rising cost, delays, and the emotional toll of litigation, many attorneys are counseling their clients to opt for early mediation — sometimes even before a lawsuit is filed. Whether it’s a civil, probate or family law matter, mediation is increasingly being used as a first stop, rather than a last resort.

But reaching complete resolution during an early-stage mediation—before discovery is complete and before parties feel the heavy burden of prolonged litigation—can make reaching necessary compromise more challenging than when all the facts are on the table and a trial date is looming.

So, what happens when early mediation does not result in a finalized settlement agreement?

It’s tempting to view an unsettled mediation as a dead end. In reality, it can be a transformational turning point. Even without a full settlement, the mediation process often yields significant progress, laying the groundwork for more peaceful and streamlined litigation and cooperation between counsel, as well as more informed, efficient, and constructive resolution down the line. Here’s how:

1. Clarifying What Matters
Mediation forces parties to distill and articulate their key concerns — legal, financial, and personal. In pre-litigation contexts, this clarity can help avoid wasted time on peripheral issues and focus any future negotiations or proceedings on what is truly at stake and prioritized for each side.

2. Reality Testing in a Low-Risk Forum
Before positions harden and legal fees accumulate, early mediation gives parties a safe space to hear hard truths — not only from the mediator and the opposing side, but even from their own counsel. This early reality check often tempers unrealistic expectations and reshapes internal decision-making.

3. Informal Discovery and Information Exchange
Mediation, especially early in a dispute, can surface critical facts or documents long before formal discovery begins. This exchange not only informs case value but also builds a more transparent foundation for future negotiations.

4. Preserving Relationships
In relationship-based disputes — such as employment, business partnerships, and probate cases — maintaining some level of civility for ongoing interaction is often a priority. Mediation offers a respectful, confidential setting to address conflicts constructively, even if ultimate resolution takes more time and extended negotiations.

5. Educating Parties and Managing Emotions
For clients, especially those unfamiliar with litigation, early mediation can be grounding. It gives them a voice, helps them understand the legal terrain, and reduces the sense of helplessness that often fuels conflict. That understanding of the process can be incredibly valuable in solidifying a resolution once sufficient information has been exchanged.

6. Creating a Path Forward
When a matter doesn't settle at the first mediation, the conversation rarely ends there. Many times, unsettled mediations can lay the groundwork for counsel to work cooperatively on discovery roadblocks. Negotiations can continue, often with committed mediators being willing to facilitate the continued process. And inevitably, these unsettled cases either find their way to a satisfactory pre-trial resolution, or they proceed to trial in a more economical and expeditious manner. Why? Because mediation opens communication, builds rapport, and often results in partial agreements or action plans that facilitate counsel’s engagement and prepares litigants for a pre-trial compromise. 

In short, an unsettled mediation — particularly when used early — should almost never be considered a failure. It’s better viewed as a strategic step toward resolution, offering clarity, efficiency, and relationship management that traditional litigation rarely provides. In today’s legal environment, where time, cost, and emotional bandwidth are precious, even a “no deal” early mediation will usually prove to be an economical litigation strategy in the end.